Despite COVID-19 and the threat of online streaming, the US’s largest movie chain, AMC Entertainment, has raised enough money to ward off bankruptcy.
The company secured an additional $917 million in investment capital, enough to keep the theater chain afloat “deep into 2021," it announced today. “This means that any talk of an imminent bankruptcy for AMC is completely off the table,” AMC CEO Adam Aron says.
It was only a month ago when the company warned it was running out of cash. At the time, AMC said it needed at least $750 million to remain viable in 2021, and conceded there was “substantial doubt” over whether it would survive.
The company is currently operating 438 out of its 593 theaters in the US. However, box office numbers in the country were bleak this past weekend, with the top film only raking in $2 million. Due to COVID-19, theaters in both New York and California also remain closed.
To keep the business running, AMC is banking on the US rolling enough COVID-19 vaccine to the populace in the coming months, paving the way for people to return to theaters in droves. Specifically, the company needs its theaters to reach "65 percent of pre-COVID 2019 attendance levels during Q3 2021 and 90 percent of pre-COVID 2019 attendance levels during Q4 2021,” it said in a stock exchange filing.
“Given the push to vaccinate the general population, an increase in cinema attendance seems likely, although AMC notes that no one knows for sure the future course of this and other strains of the coronavirus, and therefore thoughts as to future cash needs of AMC are uncertain,” the company added.
AMC has also been no fan of Hollywood studios deciding to bring their blockbusters to streaming services on the same day they release in theaters. The other problem is studios postponing their movie releases. Earlier this week, Paramount Pictures delayed the release date for The Quiet Place 2 from April to Sept. 17, removing a reason for filmgoers to return to theaters this spring.