FILE PHOTO: Three women use the emergency exit stairs of an AMC movie theater as a makeshift gym in Smyrna, Georgia, U.S. April 27, 2020. REUTERS/Elijah Nouvelage

(Reuters) – AMC Entertainment Holdings Inc, the world’s largest theater chain, said on Tuesday it would issue shares to raise cash, but warned it may still not have enough liquidity to help it avoid restructuring its debt.

The company, whose shares fell nearly 11%, said it would sell up to 15 million of its Class A common stocks, adding that a failure to restructure debt would result in it seeking bankruptcy protection.

Big theater chains such as AMC, rival Cineworld Group and others have reopened many locations, but audiences have been thin due to virus fears and delays in major releases by studios. Small and mid-sized theater companies have said they may not survive the impact of the pandemic.

Earlier this month, it had said more than 80% of its theaters in the United States would remain open, but the number of people visiting its cinemas has slumped 85% compared to last year.

AMC said it expects revenue for the third quarter to be about $119.5 million, below market expectation of $155 million. The company had raked in $1.32 billion in the year-ago quarter.

The move to issue fresh shares follows a grim evaluation by ratings agency S&P earlier this month, which said the company has only six months of cash unless it raises more capital.

AMC shares have more than halved in value so far this year and last week Chief Executive Officer Adam Aron told Reuters the company may need to raise additional capital either entirely or mostly through equity.

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“In the event the Company determines that these sources of liquidity will not be available to it or will not allow it to meet its obligations as they become due, it would likely seek an in-court or out-of-court restructuring of its liabilities,” the company said in a filing on Tuesday. (bit.ly/35jXM6t)

Reporting by Akanksha Rana in Bengaluru; Editing by Shounak Dasgupta and Arun Koyyur

Via Reuters Finance