AMC might not survive pandemic

[C-Man 27274]

https://movieweb.com/amc-theatres-reopening/?fbclid=IwAR16uIiNTBBV2koPhUU2z9A99ZjKxt1MyQqNV00uZiFqqDoA6cGFVagQ8lg

Quote

S&P Global downgraded AMC Theaters' credit rating last week to a CCC-. They were originally at a B rating before the widespread movie theater chain closures occurred. This brings the popular theater chain from "Highly speculative" to "Default imminent, with little prospect for recovery." In other words, there's a pretty good chance AMC won't be opening back up when all of this is over, which is terrible news for employees and moviegoers who were hoping for things to get back to normal soon.

While President Donald Trump is giving an estimate of April 30th for businesses to open again, there are other analysts who believe this could last well into the summer. S&P analysts state, "We expect AMC Entertainment Holdings Inc.'s AMC theaters will remain closed beyond June," due to the impact of global current events. You can read more from their statement below.

"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 its 6x net senior secured leverage covenant when tested on Sept. 30, 2020, absent a waiver from its lenders."

AMC is/was the biggest theater chain in North America. However, like a lot of big businesses, it is drowning in debt and it's only getting worse now that all of their theaters are closed. It is believed that the same thing could happen to stores like Macy's and The Gap. This is proving to be catastrophic across the board for businesses big and small. AMC reported a $5 billion-plus deficit at the end of 2019 and losses of $149 million for the year. This is after netting $110 million in 2018.

SPONSORED CONTENT

PORTFOLIO MANAGEMENT: WHY IT’S TIME FOR INVESTORS TO ACT NOW

BY DIVERSYFUND

AMC's top executives have announced they will take significant pay cuts to keep everything afloat for as long as they can. Additionally, the company has furloughed 600 corporate employees. S&P analysts are unsure if all of the cost cutting measures will be able to help out in the long run. They had this to say in a recent report.

"Even after significantly lowering its fixed costs and capital spending requirements, we only expect the company's liquidity sources to last through mid-summer and are revising our assessment of AMC's liquidity to weak. The company will likely pursue incremental financing through the CARES act or its lenders, but it is unclear when or if it will be able to secure additional liquidity."

If AMC is success in gaining financing through the CARES act, they may be able to keep their doors open. However, that will all depend on when everything is able to get back to some form of normalcy. For now, it doesn't look good, which means everybody may have to stay indoors for a lot longer than expected. Right now, this is pretty much on a day to day basis, so we're just going to have to wait this out. This news was first announced by S&P Global.

 

[mulletpelini 5216]

So you're saying its time to buy stock in AMC

[Parliament 14327]

47 minutes ago, mulletpelini said:

So you're saying its time to buy stock in AMC

It's already priced in.

[BNB 100]

What was the last good thing they put out? Breaking Bad?

[smuggs 9353]

2 minutes ago, BNB said:

What was the last good thing they put out? Breaking Bad?

I think it was the Pacer.

[Beantown Express 2.0 6559]

I

4 minutes ago, smuggs said:

I think it was the Pacer.

Maybe the Gremlin.

[RPM 26356]

You're all incorrect.

 

 

[Beau Vine 54443]

On 4/6/2020 at 1:04 AM, C-Man said:

"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 its 6x net senior secured leverage covenant when tested on Sept. 30, 2020, absent a waiver from its lenders."

I bolded the most important part. 

Default/bankruptcy is the last thing lenders want, because it guarantees that they won't get fully paid.  

[gsoda3 3283]

11 hours ago, BNB said:

What was the last good thing they put out? Breaking Bad?

amc the movie theaters isn't the same as amc the channel.

[Zepol87 9191]

First job was at the AMC 30 in mesquite. Good times

Also lol

 

 

[Pato del Muerto 52608]

Javelin or amx. Or grand wagoneer. 

[Kyle 207]

Going to be myriad stories like this. 

[WhatTheBuck 28801]

10 hours ago, gsoda3 said:

amc the movie theaters isn't the same as amc the channel.

But it's the same as the auto maker, right?

[RPM 26356]

1 hour ago, WhatTheBuck said:

But it's the same as the auto maker, right?

I think he has them confused with AMF. They built everything from bowling pinsetters to pretzel machines.

Edited April 9, 2020 by RPM

[Macanudo 13014]

10 hours ago, RPM said:

I think he has them confused with AMF. They built everything from bowling pinsetters to pretzel machines.

That had to be one the oddest corporate mergers/acquisitions ever.