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mm2 to sell cinema business including Cathay for S$84.8M to cope with

mm2 to sell cinema business including Cathay for S.8M to cope with

Cinema operator mm2 Asia, under the Cathay brand, is in talks with local investment company Kingsmead Properties to sell its cinema business for S$84.8 million.

A meeting will soon be held to get the deal approved by shareholders and regulators.

mm2 Asia’s content creation and distribution business relied strategically on their cinema business, which has unfortunately bore the brunt of Covid-19 impacts. The group hopes that this proposed sale will stabilise their financial situation and allow them to focus on developing core production content growing opportunities.

The company will use proceeds from the proposed sale to pay off their outstanding loans, which include convertible bonds that are due on 31 December 2021.

Their expected net proceeds, after deducting transaction costs and proceeds, will work out to an estimated sum of S$67.34 million.

The company’s resultant loss is expected to be around S$84.66 million, a representation of the deficit of proceeds over the book value, based on their audited consolidated financial statements for the 2021 financial year.

By end-March 2021, the company’s liabilities exceeded its assets by US$119.5 million, prompting its auditor to indicate that an existing material uncertainty is hindering the company’s long-term viability.

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A brief history of mm2 Asia’s milestones

mm2 Asia was founded in Malaysia in 2008, and is currently headquartered in Singapore.

The group made history in December 2014 by being the first, and possibly the only local production company listed on Catalist, the secondary board of the Singapore Exchange.

In 2015, mm2 Asia, through its wholly owned subsidiary mm2 Screen Management, completed the acquisition of Cathay Cineplexes and its business operations at two locations in Malaysia for S$13.8 million.

Cathay Cineplex
Cathay Cineplex / Image Credit: The Cathay

In November 2017, Cathay Organisation’s eight cinemas in Singapore were acquired by mm2 Asia for S$230 million, adding to 19 other movie theatres they operated in Malaysia.

The group placed an earlier bid in a S$184 million deal in June 2017, to acquire 50 per cent of Singapore’s Golden Village cinema business. The acquisition was later intercepted by Hong Kong’s Orange Sky Golden Harvest Entertainment (Holdings) in July 2017.

Then in last April, mm2 Asia launched a free video streaming service, mPlay Asia, with an aim to tap on the demand for quality online Chinese content.

However, from January to September that same year, mm2 Asia sank to a net loss of S$22 million. In contrast, the company made a net profit of S$9.18 million in 2019.

Featured Image Credit: Klook

Also Read

Cathay And GV In Talks For A Potential Merger To Overcome Financial Losses Caused By COVID-19

The post mm2 to sell cinema business including Cathay for S$84.8M to cope with Covid-19 financial woes appeared first on Vulcan Post.

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