AMC is easily the largest theater chain in the United States, but even the mighty have a tendency to fall. AMC was at a very comfortable market share before all of this unpleasantness unfolded. S&P Global had the theatre chain at a B rating; it left room for improvement, but most theatres had been in about the same rating in the B to Baa2 range. Now during the long closing imposed by the Coronavrius outbreak, AMC is sitting at a CCC credit rating which by most accounts leaves very little room to recover.
AMC is expected to be closed through most of the summer. That would have been their best time to regain the profit they are losing to pay off existing debts and debts that they are accruing in this frozen limbo for movie theatres that we have found ourselves in. It is easy to expect that AMC will eclipse their losses from last year of $149m. It’s unclear at this time by how much, but it certainly won’t be pretty. They are currently attempting to find a cash flow through an AMC streaming service that works similarly to most on demand services offering recently released movies for rent.
AMC is hoping to find some last minute financing through the CARES act. Though, that will still require a quick turnaround for them to start making money on their own to avoid the imminent closure when this is all over. There’s no good way to say definitively how AMC is going to make it out of this, but things certainly don’t look good.
