AMC Slams News Reports About Financial Trouble as ‘Plain Wrong’

(Bloomberg) -- The chief executive officer of AMC Entertainment Holdings Inc. said the theater chain is in “an excellent financial position” to welcome back customers in mid-July and slammed speculation in news reports as “just plain wrong.”

Adam Aron, whose company warned earlier this month that it may not survive the fallout of coronavirus, said in an email to customers that its financial peril had been exaggerated.

“In this time of great uncertainty, where facts are in short supply, speculation and guessing sometimes becomes the norm,” he said. “Somehow, that speculation can become conventional wisdom, and that conventional wisdom in turn can be reported as truth.”

The theater chain, the largest in the U.S., plans to reopen to the public on July 15 with increased sanitation measures to prevent the spread of the disease. Its more than 600 U.S. locations have been closed since March, forcing the company to increase debt and ask bondholders to take a haircut after a collapse in revenue.

Aron is known in the industry for taking sharp jabs at his critics. After Universal Pictures touted that it had made as much money releasing “Trolls World Tour” to home audiences as the previous “Trolls” film had made in theaters -- and suggested it would skip cinemas more often -- he wrote a scorching letter to the studio and said AMC would no longer show its movies.

In an earnings call last week, he said that the raising of $500 million in debt had “at least temporarily silenced all those journalists, who are breathlessly reporting with certainty that AMC would lead Hertz, Neiman Marcus and J. Crew into bankruptcy court.”

But the company’s own description of its financial condition has been stark. It reported a record $2.2 billion loss in the first quarter and warned of a worse second quarter, when all of its theaters were closed.

The company also issued a so-called going-concern notice, saying, “We may not be able to obtain additional liquidity and any relief provided by lenders, governmental agencies and business partners may not be adequate and may include onerous terms. Due to these factors, substantial doubt exists about our ability to continue as a going concern for a reasonable period of time.”

That contrasts with the email Aron sent to customers, which said the company is now “in a position of considerable strength.”

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