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AMC faces cash crunch, may have to reorganize debt

Credit: REUTERS/Mario Anzuoni

AMC Entertainment Holdings Inc, the world's largest theater chain, on Tuesday warned of a cash crunch and said it may have to go for in-court restructuring of liabilities if there are no sources of liquidity.

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Oct 20 (Reuters) - AMC Entertainment Holdings Inc AMC.N, the world's largest theater chain, on Tuesday warned of a cash crunch and said it may have to go for in-court restructuring of liabilities if there are no sources of liquidity.

The company, whose shares fell nearly 4% in premarket trading, said it expects its cash resources to be largely exhausted by the end of this year or early 2021.

While big theater chains such as AMC Entertainment, rival Cineworld Group CINE.L and others have reopened many locations, audiences have been thin due to virus fears and delays in major releases by studios. Small and mid-sized theater companies have said they may not survive the impact of the pandemic.

Earlier this month, AMC had said more than 80% of its theaters in the U.S. would remain open. Despite that, the number of people visiting its cinemas has slumped 85% compared to last year, since they reopened after lockdowns were eased, the company said.

"Substantial doubt exists about the company's ability to continue as a going concern for a reasonable period of time," AMC said in a filing on Tuesday. (https://bit.ly/35jXM6t)

(Reporting by Akanksha Rana in Bengaluru; Editing by Ramakrishnan M. And Shounak Dasgupta)

((akanksha.rana@thomsonreuters.com; Twitter: @AkankshaRanaa))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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