The largest theater chain in the world just got a $100 million shot in the arm.
On Friday, AMC said Mudrick Capital Management had agreed to invest the sum to help the cash-strapped movie theater chain survive the ongoing coronavirus pandemic.
The cinema chain will still need at least $750 million of additional liquidity to fund cash requirements through 2021.
"Given the uncertainty regarding our ability to raise material amounts of additional liquidity and the
uncertainty as to the time at which attendance levels might normalize, substantial doubt exists about the company's ability to continue as a going concern for a reasonable period of time," AMC said in a regulatory filing.
Shares of the company were down 1% in premarket trading Friday.
The company estimated its cash and cash equivalents amounted to about $320 million as of Nov. 30, and without additional liquidity, its existing cash resources will be depleted during January.
"A significant spike in coronavirus cases, together with delays of major movie releases or the direct or simultaneous release of movie titles to the home video or streaming markets in lieu of theatre exhibition, have led to theatre closures, prevented the opening of theatres in major markets and have had, and are expected to continue to have in the future, a material adverse impact on theatre attendance levels and our business," AMC said.
The cinema chain directly cited Warner Bros.' recent decision to release its entire 17-movie slate on its streaming service HBO Max and in theaters at the same time as a major concern. It also said it worried that other studios would follow suit.
AMC is currently operating around 400 of its nearly 600 theater locations with limited seating capacities and with limited hours. Theaters in New York City and parts of California remain shuttered.
The company reported that from Oct. 1 to Nov. 30 overall attendance at its U.S.-based theaters declined 92% compared with a year earlier.
AMC is in the process of trying to renegotiate its rent payments with landlords and is seeking reductions, abatements and deferrals.
Should the company not be able to secure additional sources of liquidity, it reiterated, it may have to enter bankruptcy proceedings.