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AMC Theaters has raised nearly $ 1 billion in funding since Dec. 14, averting bankruptcy for several months, the company said today. The announcement comes just days after several major studios, including Paramount, Sony and Disney’s Fox, all delayed many of their films to the second half of the year.
In total, AMC has raised $ 917 million, according to public documents. More than half of this capital comes in the form of equity which accompanies the sale of 164.7 million new ordinary shares. AMC has raised an additional $ 411 million in additional debt that is expected to be repaid by mid-2023, according to the filing. As such, AMC Theaters executives now believe they have a new “financial track” that extends “until 2021”.
“This means that any discussion of impending bankruptcy for AMC is completely irrelevant,” AMC CEO Adam Aron said in a press release.
How long this trail will actually last if nothing changes is unclear, but public documents filed by the company indicate that “in the absence of any increase in attendance” and assuming AMC will still have to pay its leases without any cash raised, “our existing liquidity would extend our operations until July 2021.”
Still, having a deep track is good news for the executives of AMC Theaters, who will likely watch more movies are delayed in the second half of 2021. Movies like Morbius, Ghostbusters: the afterlife, No time to die, Unexplored, and others have seen their release dates relegated to October 2021 and beyond, with Unexplored in 2022. Industry insiders predict more big movies are scheduled for the first half of 2021 – F9 and Black Widow, for example – will probably move too.
Studios looking to hit the magic number of $ 1 billion in box office revenue likely see no benefit in releasing films in a market where theaters are fully closed or operating at limited capacity. AMC Theaters currently has 438 of its 593 theaters in the United States open as of Jan.21, according to public documents. However, theaters that remain closed exist in some of the most important major markets in the United States, including New York and Los Angeles. As such, AMC theaters reported an overall drop in attendance of 92.3% from 2019, according to public documents.
Other films whose studios are less positive will be sold with a guaranteed return on investment; Netflix has just acquired The Mitchells against the machines, an animated film formerly called Connected which is directed by Phil Lord and Chris Miller, of Sony. While movie chains and studios struggle to figure out when they can start getting people into theater seats to watch movies, streamers like Netflix continue to thrive as people try to find new things to do. watch while being forced to stay at home.
Since everything is on hold – this is according to AMC executives – the actual time frame that the additional cash raised will buy the company from will depend on “future attendance levels.” Future attendance levels are based on two different criteria, including:
- rollout of vaccination worldwide, but especially in the United States
- government orders regarding restrictions
- consumer behavior in a post-pandemic world
Cities like Paris, Toronto and London have imposed tougher lockdown restrictions as cases of COVID-19 increase, meaning non-essential outings like going to the movies are simply not possible. In the United States, cities like Los Angeles and New York have prevented movie theaters from opening since the pandemic began and, as cases increase, may continue to prevent non-essential gatherings. If a large chunk of the population is vaccinated by the summer, things may change, but it is not known whether the United States will meet these targets.
Then there is consumer behavior. It’s an element of post-pandemic life that studios like Disney have warned their own shareholders about. Will people feel at ease again in crowded theaters with strangers, hearing people sneeze and cough, especially during the winter months? Disney executives have told shareholders they can’t predict it, but it’s something AMC Theaters executives probably think about when they try to get more money from shareholders to stay afloat. .
For now, however, AMC has a future ahead of it – at least for a little longer. Like everything these days, it all depends on what happens next.
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