mm2 Asia to raise $5m via share placement to three investors

SINGAPORE - Singapore-listed film production firm mm2 Asia will raise about $5 million from a new share placement to three investors, it said in a statement on Tuesday.

The three investors are Hesheng Media Co., Apex Capital Group and Maxi-Harvest Group.

mm2 entered into three separate share placement agreements with these investors on Dec 4 for a total of 6,351,625 shares to be issued at a proposed price of 78.72 cents per share.

This represents a premium of about 0.33 per cent to the average traded price of mm2 shares that changed hands on Dec 4.

Hesheng Media will receive 1,270,325 new shares representing about 0.58 per cent of the company's enlarged and paid-up share capital.

Hesheng Media is a Chinese media company that aims to be a marketing partner for growing businesses by providing solutions in market positioning, media market research, advertising, and media buying. Hesheng Media has been an mm2 Asia shareholder since before the latter was publicly listed.

The increase of its stake in mm2 Asia will allow for closer working ties between the two companies, mm2 Asia said.

Apex Capital and Maxi-Harvest will each receive 2,540,650 new shares representing about 1.16 per cent. Both are private investment entities.

mm2 Asia chief executive Melvin Ang said: "This placement underscores investor confidence in our future growth as we take on larger and higher-value projects while moving down the value chain. The additional funds will also help us to reduce our borrowings."

The net proceeds of the proposed placement will be used entirely for general working capital purposes, mm2 Asia said.

"With enhanced financial resources, mm2 Asia can improve its cashflow and pursue acquisition opportunities as and when they arise."

The company recently completed the acquisition of Cathay Cineplexes's business operations at two locations in Malaysia and announced a proposed acquisition of Mega Cinemas Managemen's three Mega Cineplex cinemas in northern Malaysia.

The acquisitions are part of mm2 Asia's plan to diversify and expand into the downstream value chain of film production.

The company believes that this will complement its current and future businesses, strengthen its competitive advantage through the ownership of cinemas, as well as provide a source of recurring income, it said.