The COVID-19 pandemic has been troublesome to the world on a level the likes we haven’t seen in the last five plus decades. Businesses, both big and small, all over the globe are closing indefinitely as the population is set up in self quarantine. One of these non essential businesses to have closed up shop is the theaters. AMC Theatres, Regal, and all the other cinemas have closed their doors, as groups of ten or more are not allowed to meet up. And, with no immediate end to this in sight, it looks like one of the mega conglomerates may not recover from this shutdown.
The Wrap is reporting AMC Entertainment’s credit rating has been downgraded from ‘B’ to ‘CCC-’, which means, “Default imminent, with little prospect of recovery”. The theater has been teetering on shutdown for years, having issues long before this pandemic ever even started. S&P Global has made a statement.
“We expect AMC Entertainment Holdings Inc.’s (AMC) 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. While unlikely, we could raise the rating if AMC were able to secure additional liquidity without further burdening its capital structure and if we expected the company would be able to generate substantial cash flow in 2021. This would likely require conclusive knowledge about the length of the theater closures and a view that the box office would return to normalized levels in 2021.”
This is definitely not good news for the theater, or movie fans. Losing such a large chain of theaters will make our return to normalcy even harder. What might possibly could happen, though, is that another big chain, like Regal, could purchase the company and convert AMC theaters to their own. Hopefully, something good can come of this, and we can all return to our normal lives sooner rather than later.
What are your thoughts on AMC Theatres possibly closing down? Let us know in the comments below!