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AMC Entertainment Warns Cash May Be Gone In January, Slams Warner Bros.

Entertainment:

Struggling AMC Entertainment said that with $320 million of cash it risks running out funds in January without an additional inflow . In its latest warning cry, it said it needs $750 million “to remain viable” in 2021, and even if it raises that it still risks bankruptcy next year if moviegoing doesn’t pick up.

In an SEC filing, it noted the recent move by Warner Bros. “exacerbated” the challenges.

The company announced a stopgap $100 million debt sale to Mudrick Capital Management (at an annual interest rate of 15%). Mudrick will exchange its notes for about 13.7 million AMC shares. It’s been selling stock as well and said it’s negotiting with landlords, creditors and potential joint venture partners on ways to make it through the pandemic.

“A significant spike in coronavirus cases, together with delays of major movie releases or the direct or simultaneous release of movie titles to the home video or streaming markets in lieu of theatre exhibition, have led to theatre closures, prevented the opening of theatres in major markets and have had, and are expected to continue to have in the future, a material adverse impact on theatre attendance levels and our business. 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.

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AMC estimate that if its attendance levels do not significantly improve during the first half of 2021 (to achieve an overall level of approximately 20% of pre-COVID 2019 attendance levels) and again during the second half of 2021 (to achieve an overall level of approximately 85% of pre-COVID 2019 attendance levels), the believe the liquidity shortfall would be greater than the estimated $750 million minimum shortfall noted above, “which if not addressed would prevent us from continuing as a going concern.”

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