After announcing it was closing its movie theaters in mid-March because of the coronavirus pandemic, AMC Entertainment (AMC) may be heading towards bankruptcy, according to the latest S&P Global credit rating for the cinema company.

AMC, which owns 1,006 movie theaters across the world, reportedly said it might reopen its cinemas in June, which S&P said was optimistic of the movie house.

S&P downgraded AMC to “default imminent, with little prospect for recovery.” The company had a $5 billion debt load as of the end of 2019 and reported $149 million in losses at that time.

Analysts for S&P said in their report that “While there is a high degree of uncertainty about the rate of the coronavirus’ spread and when the pandemic will peak, some government authorities estimate that the peak will occur between June and August.

“We expect AMC Entertainment Holdings Inc.’s (AMC) theaters will remain closed beyond June due to the impact of the global coronavirus pandemic. We do not believe AMC has sufficient sources of liquidity to cover its expected negative cash flows past mid-summer."

Beyond the possible bankruptcy filing, AMC has also told its landlords that it reportedly will not pay rent starting in April at hundreds of its theaters around the world. The company leases 874 theaters and owns or partially owns 62 theaters globally, Yahoo Entertainment reported.

In a letter to its landlords obtained by the news outlet, AMC said, “As the crisis unfolded and movie studios pulled major new releases (significantly reducing film product), AMC took steps to adapt and remain open. AMC proactively reduced capacity by 50% per the initial CDC guidelines, and then to 50 persons per auditorium per revised CDC.

“Some of the steps AMC has implemented are: (a) making the very difficult decision to furlough over 25,000 employees in the United States, (b) instituting a reduced pay program for theatre General Managers, (c) placing a hold on discretionary capital expenditures, and (d) making significant cost and personnel cuts at AMC’s corporate offices.

“The final step AMC is currently taking directly impacts you. Without revenue from its theatres, AMC will cease paying rent and charges under the lease effective as of April, 2020.”

Earlier this month, AMC hired Gibson Dunn & Crutcher LLP for advice about restructuring negotiations, the Kansas City Business Journal reported.

Shares of AMC Entertainment stock were down 7.8788% as of 12:34 p.m. EDT on Thursday.