AMC Entertainment Holdings Inc. AMC-8.4% said it could run out of cash by the end of the year if it does not raise additional funds or bring more movies to theaters after its closure due to a coronovirus epidemic.
AMC said on Tuesday that the movie-theater operator had reopened 494 of its 598 American theaters, but attendance on the same-theater basis was down by about 85% from the same period last year. Kansas-based AMC said that at the company’s current cash-burn rate, reserves would run out by the end of this year or early next year.
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Shares of AMC fell 8% on Tuesday morning and are down nearly 48% so far this year.
As governments imposed limits on indoor businesses and people avoided large gatherings, the coronovirus epidemic caused havoc on theaters when it came to the US AMC and temporarily closed its US theaters in mid-March.
Long-term, movie-theater chains also have to contend with an increasing reliance on streaming services to consumers, allowing producers like the Walt Disney Company and Netflix Inc. to bring movies directly to viewers at home. Disney announced a major realization on Monday, which will provide its streaming services, including Hulu and Disney +, more central to its operations.
AMC is looking to raise funds through debt or equity financing, asset sales and joint venture arrangements with business partners. The company said that it has already raised about $ 37.8 million through an offering in the market of nine million shares. In September, AMC began efforts to raise $ 180 million in equity capital. It sold nine of its locations in the Baltic region of Europe for about $ 77 million in August.
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Since reopening in August, seating in AMC theaters in the US has been limited to 20% to 40% due to public-health measures. American theaters that have yet to reopen AMC, including locations in New York and California, were among its highest performers and accounted for 23% of the company’s 2019 US revenue.
In August, Chief Executive Officer Adam M. Aron was optimistic about the company’s plans to reopen on a call with analysts.
“This is a time that AMC has been waiting for since mid-March of this terrible, terrible year,” Mr. Aaron said. “For financial and psychological reasons, we are very keen to please the filmmakers.”
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But AMC’s closed closings in about 17% of US theaters have affected the series’ expectations for this decline. Studios has thrown a gulf in theaters with plans to reopen, with delays in several blockbuster releases as the epidemic continues. Last month, AT&T Inc. K Warner Bros. Studios pushed back the release of “Wonder Woman 1984” until Christmas. MGM Holdings Inc. has delayed the release of James Bond’s film “No Time to Die” until April 2021.
Films that hit cinema screens have received a resounding reception from filmmakers who remain concerned about indoor ceremonies despite limits on seating capacity. Warner Bros. ‘ “Tenset”, a big-budget sci-fi film by director Christopher Nolan, grossed $ 20.2 million over the weekend of the Labor Day holiday in the US and Canada. Mr. Nolan’s previous film “Dunkirk” grossed $ 50.5 million in its opening weekend in 2017.
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An epidemic also brings changes in people watching new movies. Disney made cinemas one of the biggest digital releases in September to release “Mulan” for home viewing on its Disney + platform. Earlier this year, AMC found itself in a public spat with Universal Pictures about how long movies should be run in theaters to watch home cinema. In July, the companies agreed to shorten the theatrical window to 17 days, from the previous 75. Exhibitors like AMC had long argued that without special distribution windows, filmmakers would have less incentive to buy big screen tickets.
The epidemic has also created challenges for some of AMC’s biggest competitors. Last week, Regal Entertainment Group of Cineworld Group plc suspended operations in US theaters after an initial reopening in August citing the absence of a film release.
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