The movie theater chain AMC Entertainment, which was pushed to the brink of bankruptcy last year by the, said on Monday that its doors would remain open in 2021 – thanks to a cash injection of $ 917 million.
“This means that any discussion of impending bankruptcy for AMC is completely excluded,” CEO Adam Aron said in a statement. declaration.
More than half of the new funding, $ 506 million, comes from investors who bought AMC shares during the company’s December share price. offer, the company said. The remaining amount comes from a line of credit of $ 411 million subscribed by AMC through its European subsidiary Odeon.
AMC expects the $ 917 million to keep its operations afloat through 2021. The company will be successful through 2021, if moviegoers return to theaters and landlords are willing to cut rents, said AMC officials in a press release. deposit.
Millions of additional funds mean “the sun is shining on AMC,” Aron said. The CEO also acknowledged that the pace of COVID-19 vaccine deployment will ultimately decide the fate of the company.
“We’re going to need a large portion of the general public in the United States and abroad to be vaccinated,” Aron said. “To this end, we are grateful to the world’s medical communities for their heroic efforts to thwart the COVID virus. “
Movie theaters wereover the past year, as locations in the nation’s major markets, Los Angeles and New York, remain closed, while operating ones are forced to limit seats to 50% of capacity in order to keep moviegoers at bay social with each other.
AMC, Cinemark, Regal and other theaters are also reporting revenue spinoffs, as many of the year’s most anticipated blockbusters have been postponed or released on streaming services. Film companies saw their revenues fall by more thanand summer, according to data from the Motion Picture Association, Directors Guild of America, and National Association of Theater Owners.
Attendance close to zero
Attendance and revenue declines at AMC theaters in the United States reached 92% at the end of the third quarter of last year, leading the company to predict that itby the end of 2020.
The fourth quarter numbers were no better. AMC saw a 92.3% drop in US attendance in the fourth quarter, compared to the same period a year ago, according to a recent report SECOND deposit. At that time, AMC was operating 438 of its 593 open U.S. locations with limited seating and was spending around $ 125 million per month to do so, according to the filing.
With the new funding, AMC has made enough time to see if President Joe Biden’s commitment to rise in power rolling out the vaccine to 100 million people over the next 100 days would be successful, said Michael Pachter, analyst at Wedbush Securities. Pachter said he anticipates a huge return of viewers to U.S. theaters this summer – if the majority of Americans are vaccinated by spring.
“And the movie studios would make sure we have a great movie to see every week,” he said.
Those who have recently invested in AMC are also betting that cinemas will come back roaring, once the fear of catching COVID-19 is eliminated, Pachter said.
“There will be movies in theaters someday, and we’re going to see the movies in the same theaters as before,” he said.