AMC Entertainment Risks Imminently Running Out of Cash, Says S&P

S&P downgraded AMC Entertainment to SD from CC on the theater owner’s increasingly precarious cash-poor position amid pandemic-induced shutdowns and audience declines, said the ratings service Friday. Though the $100 million raised in a “debt-for-equity” deal with Mudrick Capital Management gives the chain some “incremental near-term liquidity,” S&P believes that will provide less than a month of additional cash: “We view this transaction as distressed and tantamount to a default because the lender received less than originally promised. ... Monthly cash burn was about $125 million in late 2020, and we have seen no indication that it will materially improve.” The company didn’t comment. The stock closed 17.8% higher Friday at $3.51.