AMC, the largest cinema chain in the United States, says it may go out of business due to the coronavirus pandemic.
The chain announced yesterday (June 3) that it expects to record losses of $2.4 billion in the first quarter of 2020.
As The Hollywood Reporter writes, the company have expressed “substantial doubt” over whether it can “continue as a going concern for a reasonable period of time”.
“We continue to manage proactively our cash resources to control our monthly cash spend rate. At the same time, we have begun to ramp up our cash spend with the intention of reopening theatres this summer,” AMC said in a statement.
“We believe we have the cash resources to reopen our theatres and resume our operations this summer or later. Our liquidity needs thereafter will depend, among other things, on the timing of a full resumption of operations, the timing of movie releases and our ability to generate revenues.”
They continued: “If we do not recommence operations within our estimated timeline, we will require additional capital and may also require additional financing if, for example, our operations do not generate the expected revenues or a recurrence of COVID-19 were to cause another suspension of operations.
“Such additional financing may not be available on favourable terms or at all. Due to these factors, substantial doubt exists about our ability to continue as a going concern for a reasonable period of time.”
Last month, UK cinemas asked the government to be allowed to re-open in July. The UK Cinema Association has been working towards a solution following the closure of all cinemas during the week of March 16 when the COVID-19 lockdown forced non-essential businesses and public places to close.