Movie theaters are hard hit because of this pandemic. There was also a scare that some movie theaters might not be able to make it out from this global disaster. It looks like one of the important movie theater chains is in big trouble, and according to The Wrap, they are unlikely to survive.
It’s reported that AMC Entertainment’s credit rating has been lowered from a ‘B’ to ‘CCC-,’ and what that implies is that “Default imminent, with little prospect for recovery.” Analyst S&P Global confirms:
“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.”
AMC is in major debut as it reported a $5+ billion shortfall at the end of 2019 and losses of $149 million. The analysts said:
“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.”