On Monday, the largest movie theater chain in the world, AMC Theatres, put out a statement saying that declaring bankruptcy is “off the table.” That statement should offer some reassurance to both shareholders and, more applicably for the general public, anybody who still yearns to go to a movie theater again at some point in their freaking lives.
This declaration was made after the company said it has raised $917 million in new equity and debt capital since this past December, according to Variety, and comes after a catastrophic year (an understatement) for the movie/theater/movie-theater industries.
“This increased liquidity should allow the company to make it through this dark coronavirus-impacted winter,” said the company. It added that its “financial runway” should now allow it to go “deep into 2021.” Previous reports, occasionally popping up from this past June through December, pegged AMC as doing things like expressing “substantial doubt” that it could remain viable, and also warning that they could be out of cash by early 2021.
As for the numbers, AMC raised the $917 million since Dec. 14, 2020. That figure is further broken down as $506 million of equity, with the other $411 million being chalked up to “executed commitment letters of incremental debt capital” that will be in place until the middle of 2023 by “the upsizing and refinancing of its European revolving credit facility.”
AMC also expressed optimism about its ability to negotiate lease payments with theater landlords, and that enough people will get the COVID vaccination in a reasonable timeframe to bump up attendance.
“Today, the sun is shining on AMC,” claimed the chain’s CEO and president Adam Aron. “After securing more than $1 billion of cash between April and November of 2020, through equity and debt raises along with a modest amount of asset sales, we are proud to announce today that over the past six weeks AMC has raised an additional $917 million capital infusion to bolster and solidify our liquidity and financial position. This means that any talk of an imminent bankruptcy for AMC is completely off the table.”
“Looking ahead, for AMC to succeed over the medium term, we are going to need for much of the general public in the U.S. and abroad to be vaccinated,” he added. “To that end, we are grateful to the world’s medical communities for their heroic efforts to thwart the COVID virus. Similarly, we welcome the commitment by the new Biden administration and of other governments domestically and internationally to a broad-based vaccination program.”
For reasons that should be obvious (meaning people are hesitant to sit in large groups, plus several local/state governments have decreed they be closed down) the movie theater industry has been hard hit by the coronavirus pandemic. As per just about everything you just read, theaters are banking on audiences returning due to a combination of new movies and mass vaccinations to remedy that.
Outside of the controversial decision to simultaneously release Warner Bros. films on HBO Max, most major theater-bound films have resigned to making headlines about the fact that they just continue to get delayed. On that note, last week a bunch of big films were (once again) bumped back. Those include: a half dozen Disney movies, Sony’s Ghostbusters: Afterlife, Morbius, and Uncharted, as well as the latest bond film No Time to Die, among others.
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