AMC’s Plan to Reopen.”..decision to acquire rivals such as Odeon Cinemas, UCI Cinemas and Carmike Cinemas left it heavily leveraged with more than $5 billion in debt” By Todd Horwitz, Bubba Trading

 

AMC’s Plan to Reopen

Movie-theater chain AMC Entertainment Holdings Inc. plans to reopen nearly all its U.S. locations by July 24 following four months of closures that have devastated the company’s bottom line. AMC will open 450 of its domestic theaters on July 15, the company said Thursday, followed by about 150 more coming by July 24. That would mean virtually all locations would be open in time for the first major studio releases to hit screens since the novel coronavirus closed the theatrical business.

Going to the theater will be a far different experience than it was before the pandemic. AMC is capping auditorium capacity at 30% during its initial reopening and doesn’t expect seating to return to normal standards until at least late November. As part of that process, AMC is reducing its seating capacity in order to help people social distance, it is implementing new cleaning procedures, placing hand-sanitizing stations throughout its theaters and encouraging contact-less and cash-free concessions.

“We didn’t rush to reopen,” AMC CEO and President Adam Aron said in an interview with Variety. “There were some jurisdictions in some states, such as Georgia and Texas, that allowed people to reopen theaters in mid-May. We opted to remain closed, so we could give the country time to get a better handle on coronavirus. We wanted to use this time to figure out how best to open and how to do so safely.”

AMC’s competitors Regal and Cinemark announced their own plans to resume business earlier this week, targeting a similar mid-July timeframe for when they expect to be fully operational. The exhibition sector, and particularly AMC, are under pressure to bring customers back to cinemas. Prior to coronavirus there was a great deal of consolidation in the exhibition space, much of it made possible by debt financing.

AMC’s decision to acquire rivals such as Odeon Cinemas, UCI Cinemas and Carmike Cinemas left it heavily leveraged with more than $5 billion in debt. In recent filings, AMC acknowledged that the coronavirus pandemic could push it into bankruptcy. Aron expressed confidence that the theater chain would be able to avoid Chapter 11 and would be able to have enough revenue to service its debt obligations.

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BubbaTrading.com

Financial Markets and Political Commentary

 

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About the author

Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.