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Lenders for AMC Entertainment Holdings Inc. have hired restructuring lawyers, according to people familiar with the matter, after the world's largest movie theater-chain shut down its cinemas due to the coronavirus pandemic.
A group of lenders has hired law firm Gibson, Dunn & Crutcher LLP for advice on expected restructuring negotiations, the people said.
AMC said this month that it was closing all its theaters -- more than 1,000 around the world -- for up to 12 weeks in response to the spread of the novel coronavirus. But with the U.S. surpassing 200,000 confirmed coronavirus cases, the closure is likely to last longer, according to industry analysts.
|AMC||AMC ENTERTAINMENT HOLDINGS INC||5.07||-0.53||-9.46%|
John Fithian, the president of the National Association of Theatre Owners, previously told The Wall Street Journal that movie-theater owners both large and small face substantial risk of bankruptcy due to the pandemic.
The $2 trillion rescue package that the U.S. government recently passed will be crucial in preventing many cinema companies from defaulting on their debt, Mr. Fithian said.
Much of AMC's $4.9 billion debt load is now trading at highly distressed levels. The company's junior bonds traded Wednesday at 40 cents on the dollar, down from 80 cents at the beginning of March, according to MarketAxess.
An AMC representative didn't respond Wednesday to a request for comment.
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