mm2 Asia to pursue Kingsmead offer, cinema IPO bid in parallel

The proposed sale process of mm2 Asia's cinema business will run in parallel with its runway towards listing it on the Singapore Exchange's Catalist board, the company said yesterday.

In a bourse filing, the company said that, notwithstanding the pending offer for 80 per cent of the business, called mm2 Connect, from local investor Kingsmead Properties, pegged at a range of $80 million to $120 million, its proposed initial public offering (IPO) continues and will proceed if market conditions are favourable and shareholders approve the plan.

In other words, if Kingsmead is unable to complete its acquisition ahead of mm2 Connect's IPO, the transaction will not proceed, the entertainment firm said. Instead, as previously announced, Kingsmead will have the option of using the $3 million in deposit it has paid to mm2 Asia so far to purchase shares in mm2 Connect at a discount to the cinema IPO price.

Both transactions will require the approval of mm2 Asia's shareholders, its board said.

Singapore-listed mm2 Asia received an offer for its Cathay cinema business from Kingsmead, a local financial investment firm, last month.

mm2 Asia operates eight cinemas in Singapore and 13 in Malaysia, as well as a movie film distribution business. mm2 Asia acquired the cinema chain in 2017 for $230 million.

A net loss of $99 million for the financial year ended March 31 was incurred by mm2 Asia, compared with a net profit of $6.3 million the year earlier. Liabilities exceeded assets by $119.5 million as at March 31.

These conditions prompted its auditor to indicate on July 13 that "a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern".

mm2 Asia raised nearly $54.7 million in a rights issue in April to reduce its liabilities.

Shares of mm2 Asia closed at 6.4 cents, up 0.2 cent, or 3.23 per cent.

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