Variety is reporting that AMC Entertainment, the country’s largest exhibition chain, revealed it might be forced into filing bankruptcy due to the impact of the pandemic. The company expects its first-quarter financial results to reveal a loss between $2.1 and $2.4 billion.
So far, COVID-19 has forced AMC to close its more than 1,000 theaters with 600 corporate employees being laid off or furloughed. After operating for months with no revenue, AMC recognizes that even when theaters are able to reopen, customers might hesitate to come back. The company added that complying with new health guidelines could add costs as well as cut into profits.
With growing uncertainty as to what the future looks like for AMC, the company acknowledged that “substantial doubt exists about our ability to continue as a going concern for a reasonable period of time.” The over $2 billion in loss is reportedly mainly attributable to a $2 billion impairment charge related to the shutdown.
The company said it had hoped they could reopen theaters this summer in time for Tenet and Mulan. AMC writes: “We believe we have the cash resources to reopen our theatres and resume our operations this summer or later. Our liquidity needs thereafter will depend, among other things, on the timing of a full resumption of operations, the timing of movie releases, and our ability to generate revenues. We cannot assure you that our assumptions used to estimate our liquidity requirements will be correct because we have never previously experienced a complete cessation of our operations, and as a consequence, our ability to be predictive is uncertain.”
AMC was able to avoid a Chapter 11 filing in the spring after the company $500 million in new debt to ride out the pandemic closures.