A medical employee carrying a masks walks close to the AMC movie show in Instances Sq. amid the coronavirus pandemic on Might 7, 2020 in New York Metropolis.
Alexi Rosenfeld | Getty Photos
AMC has agreed to promote as many as 15 million shares of its inventory, however fairness within the firm may quickly be nugatory if the most important theater chain on the planet recordsdata for chapter.
On Tuesday, AMC continued to warn traders about its dwindling money pile and mentioned it might should file for Chapter 11 chapter whether it is unable to safe further sources of liquidity.
Shares of the corporate tumbled greater than 11% on the information. AMC’s inventory, which has a market worth of round $387 million, has plunged 56% to this point this yr.
Chapter 11 chapter would doubtless enable AMC to remain in enterprise whereas it reworks its money owed and types out new traces of liquidity.
Movie show chains within the U.S. have been slammed by the continuing coronavirus pandemic, which first shuttered theaters after which drove away prospects and main Hollywood blockbusters.
AMC was notably weak due to the greater than $4.75 billion in debt it had amassed earlier than the disaster from outfitting its theaters with luxurious seating and from shopping for opponents reminiscent of Carmike and Odeon. AMC has round 1,000 theaters and greater than 11,000 screens globally.
“We would require vital quantities of further liquidity and there may be substantial doubt about our capability to proceed as a going concern for an affordable time period; holders of our Class A standard inventory may endure a complete lack of their funding,” the corporate wrote within the SEC submitting.
Whereas New York Gov. Andrew Cuomo gave film theaters hope over the weekend when he announced that theaters outside of New York City could reopen. Studios had advised movie show operators that they might withhold main releases if New York remained closed.
Additionally on Tuesday, AMC launched a preliminary earnings report. The corporate mentioned it had earned round $119.5 million in income through the three-month interval ended Sept. 30. That is a steep fall from the $1.32 billion AMC tallied throughout the identical interval final yr.
For the primary 9 months of 2020 AMC took in income of $1.08 billion, a fraction of the $4.02 billion it garnered throughout the identical interval final yr.