A medical employee sporting a masks walks close to the AMC movie show in Occasions Sq. amid the coronavirus pandemic on Might 7, 2020 in New York M
A medical employee sporting a masks walks close to the AMC movie show in Occasions Sq. amid the coronavirus pandemic on Might 7, 2020 in New York Metropolis.
Alexi Rosenfeld | Getty Photographs
AMC has agreed to promote as many as 15 million shares of its inventory, however fairness within the firm may quickly be nugatory if the most important theater chain on the earth recordsdata for chapter.
On Tuesday, AMC continued to warn traders about its dwindling money pile and mentioned it might should file for Chapter 11 chapter whether it is unable to safe further sources of liquidity.
Shares of the corporate tumbled greater than 11% on the information. AMC’s inventory, which has a market worth of round $387 million, has plunged 56% to date this 12 months.
Chapter 11 chapter would seemingly enable AMC to remain in enterprise whereas it reworks its money owed and types out new strains of liquidity.
Movie show chains within the U.S. have been slammed by the continued coronavirus pandemic, which first shuttered theaters after which drove away prospects and main Hollywood blockbusters.
AMC was significantly susceptible due to the greater than $4.75 billion in debt it had amassed earlier than the disaster from outfitting its theaters with luxurious seating and from shopping for rivals resembling Carmike and Odeon. AMC has round 1,000 theaters and greater than 11,000 screens globally.
“We would require important quantities of further liquidity and there’s substantial doubt about our capacity to proceed as a going concern for an inexpensive time period; holders of our Class A typical inventory may endure a complete lack of their funding,” the corporate wrote within the SEC submitting.
Whereas New York Gov. Andrew Cuomo gave film theaters hope over the weekend when he introduced that theaters outdoors of New York Metropolis may reopen. Studios had advised movie show operators that they might withhold main releases if New York remained closed.
Additionally on Tuesday, AMC launched a preliminary earnings report. The corporate mentioned it had earned round $119.5 million in income in the course of the three-month interval ended Sept. 30. That is a steep fall from the $1.32 billion AMC tallied throughout the identical interval final 12 months.
For the primary 9 months of 2020 AMC took in income of $1.08 billion, a fraction of the $4.02 billion it garnered throughout the identical interval final 12 months.