AMC Theaters is preparing for possible bankruptcy due to effects from the coronavirus pandemic. The country’s largest theater chain announced it’s first-quarter losses are expected to be between $2.1 billion to $2.4 billion. With massive debt, thousands of theaters closed and not much of a bright future ahead with the reopening, AMC could be pushed into filing for bankruptcy.
The theater chain has been relying on a hopeful reopening this summer fueled by new releases like Mulan and Tenet that are both scheduled to play in theaters. But it’s hard to say whether people will be comfortable or ready to enter crowds right away and resume movie-going habits as usual.
“We believe we have the cash resources to reopen our theatres and resume our operations this summer or later,” the company said. “Our liquidity needs thereafter will depend, among other things, on the timing of a full resumption of operations, the timing of movie releases and our ability to generate revenues. We cannot assure you that our assumptions used to estimate our liquidity requirements will be correct because we have never previously experienced a complete cessation of our operations, and as a consequence, our ability to be predictive is uncertain.”
AMC narrowly dodged filing for chapter 11 bankruptcy earlier this year by taking on $500 million in new debt to bridge the no-revenue gap.
As movie theaters including AMC are planning extra safety measures for reopening around the country. New operation standards include sanitization and running at a limited capacity to maintain social distancing guidelines.
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