AMC Entertainment Warns It's Running Out Of Cash

AMC Entertainment Holdings Inc. (AMC) warned that existing cash resources will be largely depleted by the end of 2020 or early 2021, as the COVID-19 pandemic continues to affect the cinema business.

Thereafter, the company will require additional sources of liquidity or increases in attendance levels. The required amounts of additional liquidity are expected to be material, AMC said in a regulatory filling on Tuesday.

The company said it continues to explore potential sources of additional liquidity, including additional debt and equity financing, further re-negotiations with landlords regarding its lease payments, and potential asset sales.

"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," the company said in the filling.

As of October 9, the company had resumed operations at 494 of its 598 U.S. theatres, with limited seating capacities of between 20% and 40%, representing about 83% of the U.S. theatres and 77% of 2019 U.S. same-theatre revenue.

The remaining 17% of the U.S. theatres left to reopen are primarily located in California, Maryland, New York, North Carolina, and Washington State, and include some of the company's most productive theatres, representing about 23% of 2019 U.S. revenue.

Twenty-five theatres in North Carolina and Washington State are scheduled to reopen on October 16, 2020.

The company said it has an active dialogue with local and state government officials in the remaining states, however, there is limited visibility around the timing for resumption of theatre operations in those locales.

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