Like many other companies in 2020, AMC Theatres is doing whatever it can to stay afloat, hoping that a return to normal business isn’t too far off. Theaters were forced to close several months ago, reopening back in September but with hardly any business. With the exception of Christopher Nolan’s Tenet, most major studio releases were pushed back on the schedule, or sent online for alternate releases. While AMC remains open, the company continues to struggle. On Monday, as it looks for ways to acquire cash and avoid bankruptcy, AMC made a move to attempt to sell its stocks.
According to an SEC filing that was published on Monday (per CNBC), AMC is looking to sell up to 20 million class A shares, which would secure roughly $50 million in new capital. AMC remains the largest cinema chain in the world, but it’s doing whatever it can to stay above water. The chain was already more than $4 billion in debt going into the pandemic.
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While Regal Cinemas around the United States closed their doors again, AMC announced plans to remain open, in an attempt to weather the storm. AMC has a deal with Universal that allows the studio’s films to play in theaters before heading on-demand just a couple of weeks later. This means that Freaky and The Croods: A New Age will play in AMC locations this month, but there’s no telling whether or not customers will actually show up.
At this rate, AMC could file for Chapter 11 bankruptcy by the end of 2020. The theater chain made that clear in an SEC filing late last month.
“We will require significant amounts of additional liquidity and there is substantial doubt about our ability to continue as a going concern for a reasonable period of time; holders of our Class A common stock could suffer a total loss of their investment,” AMC suggested in the filing.
That filing came on the heels of AMC announcing it would be out of cash by the end of the year, or in early 2021 at the latest. The company is hoping that the sale of these stocks can help delay that unfortunate outcome.
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