AMC theaters likely to file for Chapter 11 due to financial impact of health crisis
After nearly a century of handing out popcorn and keeping movie-goers happy, AMC theaters is poised to file for bankruptcy.
Variety reported that the pandemic, which has shuttered hundreds of the billion dollar company's theaters is the reason for the news.
In a report Thursday, MKM Partners analyst Eric Handler wrote, “Based on our view that theatres will be closed until at least August and our belief that AMC lacks the liquidity to stay afloat until that time, we expect the company will soon be faced with filing for bankruptcy.”
He downgraded AMC Theatres stock from “neutral” to “sell.”
AMC reported $265 million in cash and equivalents on hand, plus $332 million available via lines of credit, as of Dec. 31, 2019.
“AMC is the exhibition company we view with the least financial flexibility,” Handler wrote in his report. “We believe the company’s monthly cash burn rate in a no-revenue environment is running at $155 million per month, which likely keeps AMC liquid until June/July.”
Shares of AMC Entertainment Holdings were down more than 4% in trading Thursday.
AMC Theatres, headquartered in Leawood, Kansas, is the largest movie theater chain in the world.
Variety says that AMC did not immediately respond to a request for comment.
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