Theater giant hopeful after cash infusion

The world's largest movie-theater company has managed to avoid bringing the curtain down on its business.

AMC Entertainment Holdings, which operates the AMC Theatres chain in the US, announced on Monday it has raised or signed commitment letters to receive $917 million of new equity and debt capital since Dec 14. AMC had raised more than $1 billion from April through November. The company says the funding will help it stave off bankruptcy in an economy depleted by the coronavirus and subsequent shutdowns.

In the release announcing the new funding Monday, AMC CEO and President Adam Aron said "the sun is shining on AMC".

AMC estimated that after the cash infusion, its "financial runway has been extended deep into 2021". AMC also is presuming it will continue to make progress in its talks with theater landlords about the amounts and timing of lease payments owed.

"This means that any talk of an imminent bankruptcy for AMC is completely off the table," said Aron.

In its statement, the company said it was optimistic that business would rebound with COVID-19 vaccinations underway.

AMC, founded in 1920, had previously warned investors that bankruptcy was a possibility if the company failed to replenish its cash position by selling stock. It operates some 1,000 theaters and 11,000 screens worldwide.

Upgrading experience

The company, based in Leawood, Kansas, was acquired by China's Dalian Wanda Group in 2012 for $2.6 billion. At the time, it was the largest acquisition by a Chinese private enterprise of a US company. Wanda holds about 60 percent of voting rights in AMC through ownership of all the company's super-voting Class B shares.

The Beijing-based conglomerate moved to upgrade the AMC theater experience with features such as reclining seats, improved food service, and better sound systems and projection.

"What separates successful leaders from unsuccessful leaders is boldness, and I have always tried to be the opposite of timid, to fundamentally change a company or an industry for the better," Aron told The New York Times in an interview published Friday.

As of Jan 21, 438 of AMC's 593 US theaters and 86 of its 360 international theaters were open, with extensive masking, distancing and cleaning measures in place. Not included in the reopenings yet are theaters in the top two markets－New York City and Los Angeles.

All AMC theaters were closed from March through June.

While the pandemic dealt a near-fatal blow, movie theaters in the US also have had to compete for several years with streaming services such as Netflix and Amazon Prime Video, and with the proliferation of increasingly larger, flat-screen smart TVs.

In the first nine months of 2020, AMC lost $3.6 billion.

But with people having been mostly cooped up for about a year, nostalgic trips to the theater could be what AMC needs to flourish again.

williamhennelly@chinadailyusa.com