AMC warns of going concern as COVID-19 puts strain on theaters

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Entertainment
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FILE PHOTO: Closed signs are seen on an AMC Theatre during the outbreak of the coronavirus disease (COVID-19), in New York City, U.S., April 29, 2020. REUTERS/Brendan McDermid

(Reuters) – AMC Entertainment Holdings Inc on Wednesday signaled “substantial doubts” about its ability to continue operating, if the company was forced to keep its theaters closed for a longer period because of the COVID-19 pandemic.

Movie theaters worldwide have been shut since mid-March to help contain the spread of the novel coronavirus. In the United States, individual states are now considering when to allow businesses to reopen.

“We cannot predict when or if our business will return to normal levels,” the world’s largest movie theater operator said in a regulatory filing.

AMC also said it may not have sufficient liquidity to tide over until its cash-generating operations are back to normal.

The company said it had a cash balance of $718.3 million as of April 30.

Shares of the company, which said in April that it had enough cash to sustain the closures till the end of July, fell 3% in trading before the bell.

The company also said it expected to report a loss of between $2.12 billion to $2.42 billion for the first quarter ended March 31, largely due to an impairment charge of about $2 billion.

Reporting by Neha Malara in Bengaluru; Editing by Sriraj Kalluvila

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