We know that businesses of all sizes are being hurt pretty badly by the current global pandemic that is wreaking havoc all across the world. In terms of the film industry, and cinemas, in particular, that effect is being viewed as near-catastrophic, as many independent theaters scramble to find ways to survive during this time when their doors are closed. But according to S&P Global, the independent theaters aren’t the only ones facing an existential crisis. AMC Theatres is likely going to find itself without money sooner than we all thought.
In a new report from Deadline, it appears that one of the most respected financial institutions, S&P Global, doesn’t believe that AMC Entertainment, the largest theater chain in North America is going to have the money to survive a summer without films. In fact, it appears that June might very well be the make-or-break time for the cinema chain.
“We expect AMC Entertainment … theaters will remain closed beyond June due to the impact of the global coronavirus pandemic. We do not believe AMC has sufficient sources of liquidity to cover its expected negative cash flows past mid-summer, and we believe the company will likely breach” a debt covenant in September absent a waiver from its lender, S&P said.
Because of this assessment, the company’s credit rating has dropped the company’s credit rating to ‘CCC-’ from ‘B-’ with Outlook Negative.
Of course, S&P Global believes that AMC will attempt to find additional funds through lenders, “but it is unclear when or if it will be able to secure additional liquidity.”
READ MORE: AMC Theatres Furloughs 600 Corporate Workers Including The Company’s CEO
Long story short, the folks over at AMC are probably much more concerned about the future than they have been letting on in their public comments. Obviously, that’s to be expected, when the company is hoping to quell the fears of investors, workers, and customers, all wondering when the world will be able to go to the cinemas once again.
As of now, AMC has announced that the long-term projection is that the theaters will remain closed until June. However, with the most recent advice from experts pointing to a difficult summer, and almost every major movie studio pulling their films from the seasonal slate, it appears that no one is expecting that doors will reopen in June. And if that’s the case, then clearly, AMC has to figure things out.