(Reuters) – AMC Entertainment Holdings Inc, the world’s largest theater operator, said on Friday it had enough cash balance to withstand a global suspension of operations until a partial reopening in July, as the U.S. government plans to reopen the country’s economy.
FILE PHOTO: The AMC Theatres in the Georgetown neighborhood is closed due to a global outbreak of coronavirus disease (COVID-19), in Washington, U.S., March 20, 2020. REUTERS/Joshua Roberts
Movie theaters will be the first ones to reopen under U.S. President Donald Trump’s guidelines that call for reopening of businesses shut down by the new coronavirus in three stages.
Shares of AMC surged 40% in early trading, while those of Imax Corp and Cinemark Holdings Inc rose 10% and 18%, respectively.
Thousands of theaters closed down last month and the National Association of Theatre Owners had called on the U.S. Congress and the Trump administration to provide emergency relief.
Phase one of Trump’s plan here allows theater operators to reopen under strict physical distancing protocols.
AMC, which had a cash balance of $299.8 million as of March 31, had sought to raise $500 million through a notes offering.
Peer Cinemark is also looking to raise $250 million through debt sale.
AMC said its business could be affected on reopening, if disruptions caused by the virus lead to changes in consumer behavior including social distancing or favoring alternative forms of entertainment.
Theater operators could come under additional pressure as Hollywood studios have pushed back the release of big movies and are unlikely to release big-budget films, as they cannot release them nationwide.
AMC has put many employees on furloughs including Chief Executive Officer Adam Aron. Some workers will see reduced hours and reduced pay, while others will be cut to no hours and no pay.
Reporting by Supantha Mukherjee in Bengaluru; Editing by Aditya Soni and Vinay Dwivedi
