AMC Theaters has warned shareholders via an SEC filing that it is in danger of running out of money.
As the coronavirus pandemic continues to stretch out for the foreseeable future, the exhibition side of the movie industry faces more challenges. AMC Theaters filed documents with the SEC on Friday that stated, “In the absence of additional liquidity, the Company anticipates that existing cash resources will be depleted during January 2021.”
AMC revealed that it has completed a debt offering of $100M to Mudrick Capital Management. It has also deferred $400M in rent obligations into 2021, and it estimates that it needs at least $750M in total to keep itself from filing bankruptcy in 2021.
“These challenges have been exacerbated by the announcement by Warner Bros. that its entire studio film slate for 2021 will move to simultaneous release, which may result in other studios adopting a similar strategy,” AMC said in its filing.
In addition to the announcement from Warner Bros., AMC and other theater chains are still facing closures in major U.S. cities such as New York and Los Angeles. Across the U.S. the company has 404 of its 594 locations open, and all of those are operating with limited capacity. Internationally, only 108 of its 359 locations are currently open with limits varying by territory.
“It is very difficult to predict when theatre attendance levels will normalize, which we expect will depend on the widespread availability and use of effective vaccines for the coronavirus,” the company stated.
While vaccines are beginning to circulate, it is still going to take some time for the effects to be seen in various locations around the world. There is a high probability that will lead to further film delays to the second half of 2021, leaving the first half of the year pretty bare for exhibitors.