Voluntary liquidation of Cathay Cineplexes 'not expected to adversely impact core businesses': mm2 Asia

Cathay Cineplexes' parent company, mm2 Asia, said that the voluntary liquidation of its cinema chain business is unlikely to have a major impact on its core businesses or continuing operations.

In a bourse filing on Wednesday (Sept 3), the entertainment company responded to queries from the Singapore Exchange Regulation and said that the liquidation will instead "expected to improve the group’s overall cashflows and profitability".

mm2 announced the voluntary liquidation of Cathay earlier on Monday (Sept 1), citing that it was "no longer feasible" to continue with operations due to the group's inability to reach any "mutually agreeable restructuring outcomes of its payment obligations" to creditors.

In its filing, mm2 said that its financial performance has already been "fully reflected" and "publicly disclosed" in consolidated earnings that were released on Aug 28, which reflected a net loss of $122.4 million for FY2025.

Cathay's liquidation is "not expected to adversely impact the core businesses or continuing operations of the Group given that (Cathay) has been cashflow negative and loss making since the commencement of the Covid-19 pandemic", it said.

However, the company emphasised the "continued strength of the group’s core content business", which contributed $109.8 million in revenue.

At the same time, mm2 said that it has had "positive negotiations and ongoing engagement" with creditors.

mm2 is also optimistic on the value of its "strategic stake" in UnUsUal Limited — a leading live event and concert organiser in the region — and believes that it will "capture the expected continued growth in the event and concert segment".

Additionally, mm2's business will be supported by planned fundraising initiatives to fund debt repayment and working capital, including the ongoing proposed placement of almost 1.9 million ordinary shares announced on July 4.

Under the proposed placement, each share would be priced at a minimum of $0.008 and subsequently result in net proceeds of $14 million if all shares are subscribed to.

Hence, mm2 said its ability to continue operating is unlikely to be adversely affected by Cathay's liquidation.

Fees owed to Disney

mm2 also made a separate SGX filing on Wednesday, saying its Malaysian subsidiaries received letters of demand from Disney for alleged film licence fees owed since November 2023.

Disney cited a cumulative sum of RM1.2 million (S$374,570) in fees owed by MM2 Star Screen and MM2 Screen Management.

mm2 said that its subsidiaries have not screened any Disney films since June 2024, and that it plans to "actively engage" with Disney to resolve the matter.

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dana.leong@asiaone.com