AMC Theatres across the country were closed at the beginning of the coronavirus pandemic, as groups in public were limited and stay at home orders were put into effect. Now, analysts are saying that the company is likely to file for bankruptcy.
Today, MKM Partners analyst Eric Handler released a report, saying “Based on our view that theatres will be closed until at least August and our belief that AMC lacks the liquidity to stay afloat until that time, we expect the company will soon be faced with filing for bankruptcy.”
Prior to the pandemic, AMC reportedly had close to $600 million, between cash and equivalents and lines of credit, says Variety. Those funds are quickly being drained with AMC’s 1,000 theaters worldwide closed for the time being.
“We don’t need a bailout, we just need loans, which we will be able to pay back with interest when we re-open and revenues start coming back in the door,” said AMC CEO Adam Aron in late March, according to a Media Play News report of Aron looking for assistance from Congress’ relief package.
AMC is the exhibition company we view with the least financial flexibility,” Handler wrote in his report today. “We believe the company’s monthly cash burn rate in a no-revenue environment is running at $155 million per month, which likely keeps AMC liquid until June/July.”
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