S&P Sees AMC Going Cash-Dry, Barring ‘Significant’ Boost in Theatergoing

reopening, additional major theatrical releases are delayed, and its cash burn might accelerate now that its theaters are open,” S&P said Friday. S&P expects AMC to run out of cash within six months “unless it is able to raise additional capital, which we view as unlikely, or attendance levels materially improve,” it said. Even with the additional liquidity from AMC's recent debt restructuring, S&P doubts the company will have enough cash on hand to cover its “fixed charges” by early April, it said. “Now that the majority of its theaters are open and box office receipts remain weak, we expect the company's cash burn will remain elevated and could accelerate further over the remainder of 2020 unless there is a significant improvement in attendance levels relative to the September box office.” Operating conditions for AMC remain “highly uncertain from the impact of COVID-19,” said S&P. The chain began reopening most theaters with low seating capacities in April, but New York and Los Angeles locations remain closed, S&P said: Even if those remaining theaters were to reopen, the lack of major film releases “will likely result in low theater attendance for some time.” AMC didn’t respond to questions. AMC reopened more than 100 U.S. locations under its “Safe & Clean” COVID-19 protocols in mid-August, floating an admission price of 15 cents for the day to lure customers back to the movies. But S&P said it was to little avail because Americans don't trust returning to theatergoing. The pandemic will continue to harm "theater attendance and consumer behavior into 2021," said S&P. "We anticipate that global cinema attendance will recover much more slowly in the fourth quarter of 2020 than we had previously expected and now expect the impact of COVID-19 on theater attendance to last well into 2021." The negative outlook "indicates our view that AMC could face a liquidity shortfall over the next six months," said S&P.