AMC Entertainment Holdings, which operates the world’s largest movie exhibitor, AMC Theatres, Sept. 24 disclosed it has authorized the sale of 15 million shares of Class A common stock in an effort to build equity levels during the ongoing coronavirus pandemic.
Operating 70% of its domestic screens at reduced capacity due to social distancing requirements, AMC said it has seen 1.4 million moviegoers frequent theaters through Sept. 14, which is down 81% from the previous-year period. With many AMC screens still shuttered in California, Maryland, Michigan, New York, North Carolina, and Washington State, the company said the affected theaters represented 28% of its entire 2019 revenue.
As of Aug. 31, AMC’s cash balance was $507.9 million, which included the initial $37.5 million proceeds received from the sale of its Baltics theatres. The company’s cash burn for July and August, excluding the proceeds from the sale of the Baltic theatres, was $230.4 million, or an average of approximately $115.2 million per month, and was primarily impacted by initial reopening expenses, including initial
costs associated with the chain’s “Safe and Clean” initiative and minimum lease payments as theatres began to reopen.
With studios further delaying major releases into 2021 due in part to the lack of a virus vaccine, AMC is scrambling to keep the lights on.
“We currently estimate that unless theatre attendance levels improve significantly from the third quarter of 2020 to the fourth quarter of 2020 and again into 2021 and we achieve levels of attendance approaching approximately three-quarters of normalized levels, we will continue to require additional sources of liquidity to meet our obligations…and our required amounts of additional liquidity may be significant,” AMC said in a statement.