As per Inside the Magic’s last , the update planned to close all for 6-12 weeks. Now, debt rating agency S&P Global Ratings have downgraded ’s credit rating from ‘B’ to ‘CCC-.’
This business credit rating denotes, “Default imminent, with little prospect for recovery.” With the rise of streaming services like Netflix, Hulu, and, more recently, , many + around the country had seen a reduction in business before the ongoing pandemic outbreak.
Related : Could Disney Buy AMC Theaters? Federal Judge Says Yes
Since being forced to close due to federal and state social distancing regulations and shelter-in-place orders, like AMC have fallen on even more challenging times.
Financial analyst S&P Global stated, “We expect Inc.’s (AMC) theaters will remain closed beyond June due to the impact of the global . We do not believe AMC has sufficient sources of liquidity to cover its expected negative cash flows past mid-summer.”
At the end of the 2019 fiscal year, AMC reported a $5+ billion deficit and losses totaling $149 million. ’s subsidiaries, including Odeon Cinemas, could also be impacted should the theatre chain close its doors permanently.
Related : AMC: Disney 2021 Movie Slate Might be Too Little Too Late
S&P did acknowledge that “While unlikely, we could raise the rating if AMC were able to secure additional liquidity without further burdening its capital structure and if we expected the would be able to generate substantial cash flow in 2021.”
The analysts said they would need “a view that the . would return to normalized levels in 2021.” This is a long shot, as production studios have announced that they will skip theatrical releases entirely for certain upcoming movies, further hurting the
Most recently, Walt Studios confirmed that Artemis Fowl, initially slated for a May 29, 2020 release date, will go straight to streaming on the + platform.
It is not yet known how the potentially lengthy closure will impact chains besides , including and .
The Inside the Magic team will the situation and bring you updates as needed.