AMC Theaters (NYSE: AMC), the largest movie theater chain in the world, said Wednesday it has “substantial doubt” it can survive the closure of all its locations throughout the coronavirus pandemic.
The company had reported in April it could withstand the cease of all operations until Thanksgiving. Nevertheless, a filing with the Securities and Exchange Commision, revealed its apprehension in regards to liquidity, revenue and the reopening of theaters.
“We are generating effectively no revenue,” the company said in its filing.
AMC disclosed that revenue had plummeted USD941.5 Million, almost 22% lower than the USD1.2 Billion it made in last year’s quarter.
In better news, the company was trading 5% more Wednesday, partly due to the restructuring of its debt according to Michael Pachter, a Wedbush analyst.
“Even though the rate is much higher (12% vs. an average of around 6%), it provides liquidity and buys them some time,” he said.
The movie theater chain aims to reopen this summer and has been in talks with landlords to postpone rent payments in order to stay ahead.
“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,” the company said. “If we do not recommence operations within our estimated timeline, we will require additional capital and may also require additional financing if, for example, our operations do not generate the expected revenues or a recurrence of COVID-19 were to cause another suspension of operations.”