Cathay Cineplexes ropes in restructuring specialist as more payment demands pile up

SINGAPORE – Cathay Cineplexes has received additional letters concerning outstanding rent, its parent company mm2 Asia announced in bourse filings on July 29, alongside key changes to its board and leadership team.

This follows an earlier update on July 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.

Shares of mm2 Asia sank 16.7 per cent, or 0.1 cent, to 0.5 cent on July 30.

In its latest statement, mm2 informed shareholders that Cathay Cineplexes (CCPL) received a legal claim on July 28.

The claim, dated July 25, was filed in the High Court of Singapore by Lendlease Retail Investments, the former real estate investment trust (Reit) manager for CCPL’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 $1.98 million in rent up to March 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 $1.66 million as at July 25. The claim also includes legal costs and any other relief the court deems appropriate.

Additionally, CCPL has received a letter of demand dated July 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 $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, mm2 announced key changes to its board and leadership team following a series of resignations, retirement and new appointments.

It said these changes reinforce its “commitment to strategic financial and operational restructuring to safeguard its future”.

The company said that in view of the current cinema-related creditor negotiations and prolonged financial challenges stemming from the pandemic, it is strengthening its management team and bringing Mr 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.

Mr 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 “uniquely qualified” to lead mm2’s debt management and operational reorganisation with decades of cross-border experience.

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

At the same time, Mr Chang Long Jong, mm2’s current chief executive since April 2017, will retire on Sept 1. The former Mediacorp deputy CEO played a key role in expanding mm2 Asia’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, Mr Jack Chia will resign as a non-executive and non-independent director of the company effective July 31, and will also cease to be a member of the audit committee following his departure.

Mr 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. Mr Ng will transition to the role of chief content adviser, where he will focus on content development.

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

“These appointments reflect our commitment to a recovery strategy to ensure the group’s sustainability to grow the business,” said Mr Melvin Ang.

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