Entertainment group also announces key changes to board and leadership team

 

[SINGAPORE] Cathay Cineplexes has received additional letters concerning outstanding rent, its parent company mm2 Asia : 1B0 +20% announced in bourse filings on Tuesday (Jul 29), alongside key changes to its board and leadership team.

 

This follows an earlier update on Jul 17, when the entertainment group said it was evaluating all available options to address its financial challenges including the possible winding up of the cinema chain.

 

In its latest statement, mm2 Asia informed shareholders that Cathay Cineplexes (CCPL) received a legal claim on Jul 28. The claim, dated Jul 25, was filed in the High Court of Singapore by Lendlease Retail Investments, the former real estate investment trust (Reit) manager for CCPL&rsquo s cinema lease at JEM. That role has since been assumed by DBS Trustee acting in its capacity as trustee of Lendlease Global Commercial Reit.

 

The claim relates to outstanding rental and other payments owed by CCPL under its lease at JEM, incurred before the change in Reit manager. 

 

According to the filing, the claimant is seeking payment of S$1.98 million in rent up to Mar 31, 2022. In addition, the claimant is asking for interest on the overdue amounts at a contractual rate of 1 per cent per month, calculated daily, amounting to S$1.66 million as at Jul 25. The claim also includes legal costs and any other relief the court deems appropriate.

 

Additionally, CCPL has received a letter of demand dated Jul 29 from Resorts Concept, the licensor of its premises at E!Hub@Downtown East. The letter demands payment of licence fees, service charges, utilities, interest and related charges totalling S$580,000.

The board of CCPL said it is actively engaged in discussions with Resorts Concept to resolve the outstanding arrears. It is understood that CCPL is currently obtaining legal advice on both matters. 

 

mm2 said it is also seeking its own legal advice in relation to the matters and will make further announcements as and when there are material developments. 

 

New leadership team

Separately, the entertainment group announced key changes to its board and leadership team following a series of resignations, retirement and new appointments.

 

mm2 said these changes reinforce its &ldquo commitment to strategic financial and operational restructuring to safeguard its future&rdquo .

 

In view of the current cinema-related creditor negotiations and prolonged financial challenges stemming from the pandemic, mm2 is strengthening its management team and bringing Ang Chiang Meng on board as chief restructuring officer as of Aug 1.   He will also join the mm2 board as a non-independent executive director

 

Ang is co-founder and managing partner of Argile Partners, a regional consultancy firm, and executive director of R& O Company, specialising in corporate and debt restructuring. 

 

mm2 said he is &ldquo uniquely qualified&rdquo to lead mm2&rsquo s debt management and operational reorganisation with decades of cross-border experience.

 

&ldquo His credentials as a senior accredited director, chartered valuer and restructuring expert will be pivotal in this transition,&rdquo it added.

 

At the same time, Chang Long Jong, mm2&rsquo s current chief executive officer since April 2017, will retire on Sep 1. The former MediaCorp deputy CEO played a key role in expanding mm2 Asia&rsquo s footprint in the regional entertainment industry.

 

Executive chairman Melvin Ang will assume interim CEO responsibilities while the board conducts a formal search for a permanent successor. 

 

Meanwhile, Jack Chia will resign as a non-executive and non-independent director of the company effective Jul 31, and will also cease to be a member of the audit committee following his departure.

 

Gary Goh has been appointed managing director of mm2 Entertainment, succeeding chief content officer Ng Say Yong, who will step down from his current role on Aug 31. Ng will transition to the role of chief content adviser, where he will focus on content development.

 

Goh&rsquo s promotion is said to &ldquo reflect the board&rsquo s confidence in his ability to steer mm2 through this challenging period and a much-needed injection of fresh resources and expertise&rdquo .

 

Following these changes, mm2&rsquo s board of directors will comprise Melvin Ang as executive chairman, Ang Chiang Meng as executive director, Lai Hock Meng as lead independent director, Tan Khee Giap and Tan Ching Yee as independent directors, and Choo Kee Siong as a non-executive director.

 

&ldquo These appointments reflect our commitment to a recovery strategy to ensure the group&rsquo s sustainability to grow the business,&rdquo said Melvin Ang. 

Eight counterparties have issued letters of demand against the company and Cathay Cineplexes

 

[SINGAPORE] In a bourse filing on Monday (Aug 4), Cathay Cineplexes owner mm2 Asia said it has received eight letters of demand for a total of S$17.6 million outstanding, but can continue as a going concern.  

 

The embattled entertainment group added it is continuing negotiations with each counterparty over the claims.

 

It also stated that its board had assessed its ability to continue as a going concern, which means that it is expected to be able to operate for the next 12 months. Only about S$4.4 million claimed by four counterparties are secured against the corporate guarantee of the company, which is around S$3.1 million as at Jul 31, said mm2 Asia.

 

The media company also said it has had &ldquo positive&rdquo negotiations with the group&rsquo s creditors, including its proposed plan to defer a S$54 million bond repayment by six years.

 

Ongoing cost optimisation initiatives, including a potential winding up of Cathay Cineplexes (CCPL), were also stated as a reason for its ability to continue as a going concern.

 

mm2 Asia brought in restructuring specialist Ang Chiang Meng as its chief restructuring officer as at Aug 1, saying that he is &ldquo uniquely qualified&rdquo to lead mm2&rsquo s debt management and operational reorganisation.

 

The company&rsquo s chief executive officer Chang Long Jong is set to retire on Sep 1.

 

In the filing on Monday, mm2 Asia added that any court orders to pay all demands in full will be &ldquo limited to CCPL&rdquo and will be unlikely to cause an impact on the rest of the mm2 Asia group.