LEAWOOD, KS (CelebrityAccess) — AMC Theatres, the world’s largest cinema chain, warned their investors that they could run out of money by the end of the year.
In financial filings released on Tuesday, AMC said that without a significant increase in attendance, its cash reserves will be “largely depleted” by the end of 2020 or early 2021.
They also warned that their ability to secure new capital through loans due could be impaired to their current levels of indebtedness and that the amount of capital needed may be “material”.
“There is a significant risk that these potential sources of liquidity will not be realized or that they will be insufficient to generate the material amounts of additional liquidity that would be required until the company is able to achieve more normalized levels of operating revenues,” AMC said.
AMC, which like other major theater chains was forced to shut down virtually all of their 1,000 cinemas around the world, laid the blame for their financial woes at the feet of COVID-19.
“The COVID-19 pandemic has had and will continue to have a significant and adverse impact on our business. As a result of the pandemic, primarily all of our theatres worldwide temporarily suspended operations between March and late summer, during which period we generated only immaterial revenue,” AMC said in their most recent prospectus, filed on September 30th.
AMC also highlighted the lack of movies in the immediate release pipeline as a major stumbling block in their ability to remain a going concern. Studios have delayed many highly anticipated films that might have helped to lure audiences back to theaters, such as the espionage thriller “No Time To Die”, the rebooted “Top Gun” and “The Batman,” until 2021.
Other movies, such as Pixar’s “Soul” headed directly to on-demand streaming, which may spell an end to the exclusive cinematic release window that helped keep cinemas relevant in the movie distribution chain before the pandemic.