It was clear again in February that the Coronavirus was going to have an effect on cinema in 2020. You solely needed to look to China, the place cinemas have been closed down for concern of spreading an infection, to get a style of what was coming down the road. Some assumed that spring 2020 movies would merely see a diminished field workplace as folks stayed away from crowded locations. Then, because the state of affairs acquired worse, it grew to become obvious that lockdowns have been coming. As such, two weeks in the past, AMC Theaters introduced that they have been closing all of their US theaters for the subsequent 6-12 weeks.
With the pandemic exhibiting no indicators of abating anytime quickly, enterprise analysts now suppose it’s unlikely the chain will ever open its doorways once more. AMC, the biggest home theater chain was already in hassle earlier than Coronavirus, reporting a $5 billion-plus deficit on the finish of 2019 and losses of $149 million for the yr. However now, with their doorways shuttered for the foreseeable future and no cash coming in in any respect, S&P International has downgraded AMC’s credit standing from ‘B’ (Extremely speculative) to ‘CCC’ (Default imminent, with little prospect for restoration).
S&P International justified the downgrade by saying:
“We count on AMC Leisure Holdings Inc.’s (AMC) theaters will stay closed past June because of the affect of the worldwide coronavirus pandemic. We don’t imagine AMC has ample sources of liquidity to cowl its anticipated unfavorable money flows previous mid-summer.”
And sadly, any possibilities of restoration look slim, in accordance with the agency:
“Whereas unlikely, we might increase the score if AMC have been in a position to safe extra liquidity with out additional burdening its capital construction and if we anticipated the corporate would be capable of generate substantial money stream in 2021. This could possible require conclusive data concerning the size of the theater closures and a view that the field workplace would return to normalized ranges in 2021.”
Nicely, with there being no finish in sight to the pandemic and no assure of field workplace income returning to pre-2020 ranges, I feel the writing is on the wall for AMC Theaters. The chain shutting down will surely be a significant blow to the home movie business although, to not point out its hundreds of employees, so right here’s hoping somebody is available in to reserve it.
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