AMC staves off bankruptcy as studios to delay their films all over again - The Verge

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Since December 14th, AMC has raised nearly $1 billion

The company announced today that since December 14th, AMC Theaters has raised nearly $1 billion in funding, avoiding bankruptcy for several months. Several major studios including Paramount, Sony and Disney’s Fox announced the news a few days ago.

To the second half of the year.

AMC raised a total of US$917 million,

. More than half of the capital was obtained in the form of equity sales of 164.7 million new common shares. The document shows that AMC has raised an additional $411 million in incremental debt, which is scheduled to be repaid in mid-2023. Therefore, AMC theater executives now believe that they have a new "financial runway" that can be extended to "2021".

AMC CEO Adam Aron said in a press release: "This means that any remarks about AMC's impending bankruptcy are completely out of discussion."

If there is no change, it is not clear how long the runway will actually last, but the public document submitted by the company says: “without increasing attendance” and assumes that AMC will still pay for it without paying any additional fees. Rental costs. With the funds raised in cash, "our existing liquidity will enable our business to continue until July 2021."

Nevertheless, it is good news for AMC theater executives to have a deep runway, as more movies will be delayed until the second half of 2021.

,

Many more people downgrade its release date to October 2021 and beyond,

The film will be released in 2022. Industry insiders predict that other major movies will be launched in the first half of 2021.

, For example-may also move.

Studios that want to achieve an incredible $1 billion in box office revenue may not have any upside to release films in markets where theaters are completely closed or with limited capacity. Public documents show that as of January 21, AMC theaters currently have 438 out of 593 theaters in the United States open. However, some of the most important major markets in the United States, including New York and Los Angeles, have closed theaters. Therefore, according to public documents, the overall attendance rate reported by AMC theaters dropped by 92.3% compared to 2019.

Other film studios’ less active films will be sold with a guaranteed return on investment; Netflix just acquired

, Used to be an animated movie

Directed by Sony's Phil Lord and Chris Miller. Although theater chains and movie studios are struggling to figure out when they can begin to attract people to theater seats to watch movies, streaming media like Netflix continue to flourish as people try to find them when they are forced to stay at home new things.

According to AMC executives, since everything is in progress, the actual time that the extra cash raised will be used to purchase the company depends on the "future attendance rate." Future attendance levels are based on several different criteria, including:

With the increase in COVID-19 cases, cities such as Paris, Toronto and London have set stricter lockdown restrictions, which means that unnecessary outings like movies are simply impossible to achieve. Since the beginning of the pandemic, cities such as Los Angeles and New York have prevented movie theaters from opening, and as cases have increased, unnecessary gatherings may continue to be prevented. If a large part of the population is vaccinated by the summer, the situation may change, but it is unclear whether the United States will achieve these goals.

Then there is consumer behavior. This is an element of life after the pandemic, and studios like Disney have warned their shareholders. Will people feel comfortable sitting in a crowded theater with strangers again and hear people sneezing and coughing, especially in winter? Disney executives told shareholders that they could not predict this, but this is something that AMC Theaters executives may still be considering as they try to divert more cash from shareholders to make ends meet.

However, so far, the future of AMC is bright-at least it will take longer. Like everything these days, everything depends on what happens next.

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