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Independent Singapore
17-07-2025
- Business
- Independent Singapore
Will Cathay Cineplexes soon bid its final farewell amid millions in debt?
Photo: Google Maps/Ivan Lim SINGAPORE: Cathay Cineplexes may soon bid its final farewell, with owner and operator mm2 Asia announcing it is evaluating 'all available options'—including winding up the cinema business—to address the millions of dollars in financial challenges it is facing. In a bourse filing on Thursday (July 17), mm2 Asia said, 'The Group has been committed towards the continued operation of its cinema business in Singapore. However, such commitment requires the support from its landlords, which has not been meaningful despite the difficult operating environment for cinemas and the wider retail industry over the past years caused by, amongst other things, the COVID-19 pandemic.' Channel News Asia (CNA) reported that in the last three years, Cathay Cineplexes has closed six outlets across Singapore, including its West Mall outlet in February. Only four are still operating today. Before announcing its West Mall outlet closure, mm2 Asia received letters of demand from landlords of its Century Square and Causeway Point outlets, seeking S$2.7 million in unpaid rent and other costs . That figure has since risen to over S$3 million. More demands have come in this month. The landlord of its former Jem outlet is seeking around S$3.4 million in rental arrears, while Linkwasha Holdings is demanding repayment of S$7.56 million from a S$30 million loan Linkwasha provided in 2017, which helped fund mm2 Asia's acquisition of Cathay Cineplexes from Cathay Organisation. The company said that while it has repaid its loan over the years, the outstanding amount is now due by July 28. In a separate bourse filing on Wednesday (July 16), the company also proposed to extend the maturity date of a S$54 million bond deal originally due December 29, 2025, to December 30, 2031. mm2 Asia said it is reviewing all options in light of its recent receipt of various statutory demands and outlined three possible paths forward: To continue negotiations with Cathay Cineplexes' landlords with the aim of restructuring existing obligations consensually To pursue a scheme of arrangement under a court-supervised process to restructure the cinemas' debts while keeping operations running Or to pursue the winding up of Cathay Cineplexes In February, Cathay Cineplexes launched its 'Save Our Screens' campaign in a bid to keep its cinemas running. However, the move drew flak from cinema-goers who faced issues using their vouchers. mm2 Asia said it would make further announcements should there be any material developments regarding legal demands or lease-related matters. 'Shareholders are advised to exercise caution when dealing in the securities of the company and to refrain from taking any action in relation to their shares which may be prejudicial to their interests,' it added. /TISG () => { const trigger = if ('IntersectionObserver' in window && trigger) { const observer = new IntersectionObserver((entries, observer) => { => { if ( { lazyLoader(); // You should define lazyLoader() elsewhere or inline here // Run once } }); }, { rootMargin: '800px', threshold: 0.1 }); } else { // Fallback setTimeout(lazyLoader, 3000); } });
CNA
09-07-2025
- Business
- CNA
Cathay Cineplexes faces fresh S$7.6 million repayment demand amid deepening debt crisis
SINGAPORE: The debt crisis surrounding Cathay Cineplexes appears to be worsening, with the emergence of a new debtor seeking about S$7.56 million (US$5.9 million) to be repaid by the end of this month. In a bourse filing on Wednesday (Jul 9), mainboard-listed firm mm2 Asia, which owns and operates Cathay Cineplexes, said it had received a statutory demand from lawyers representing Linkwasha Holdings, a related entity of Cathay Organisation. The demand concerns a S$30 million loan that Linkwasha extended to mm2 Asia in 2017 to partially finance the latter's S$230 million acquisition of Cathay Cineplexes from Cathay Organisation. Mm2 Asia said it has been making repayments to Linkwasha over the years despite the pandemic's impact on its cinema business and the 'substantial debt burden' it took on to fund the acquisition. It added that as of Jul 7, when the statutory demand was issued, it had 'repaid the majority of the loan, with the outstanding amount remaining at S$7,550,500 including interest'. Linkwasha - formerly known as Orchard Bowling and Cathay Bowl, according to the Accounting and Corporate Regulatory Authority's Bizfile portal - has asked for the outstanding amount to be paid by Jul 28. Alternatively, mm2 Asia can 'secure or compound the said sum to the reasonable satisfaction' of Linkwasha by the same date. But if it fails to do so, it will be deemed unable to pay its debt, according to the bourse filing. The entertainment firm said it is seeking legal advice and intends to engage with Linkwasha to 'explore all available options whilst continuing to pursue various fund-raising exercises'. This is not the only repayment deadline that the embattled cinema chain and its parent company are facing this month. Lendlease Global Commercial REIT - the landlord of Cathay Cineplexes' shuttered outlet at Jem shopping mall - has demanded payment of about S$3.45 million in rental arrears by Jul 22. The cinema chain's financial woes first surfaced in early February, when it revealed that it had received letters of demands from the landlords of its movie theatres at Century Square and Causeway Point for about S$2.7 million owed in rent and other costs. At the time, Mr Melvin Ang, founder and executive chairman of mm2 Asia, said talks on a repayment schedule with both landlords were underway. In an exclusive interview with CNA, he also expressed optimism about the cinema industry, citing a strong slate of upcoming Hollywood releases expected to draw moviegoers back. But later that month, Cathay Cineplexes announced the closure of its West Mall cinema, the same day its lease at the Bukit Batok shopping complex expired. On Mar 27, it also shuttered its Jem outlet after receiving a notice of termination from the landlord to discontinue the lease. The cinema business' ongoing struggles have taken a toll on the finances of its parent company. On May 19, mm2 Asia requested an extension to file its FY2025 financial results, annual report and other documents. In an application made known via a bourse filing, the company cited reasons such as demands from landlords placing 'significant pressure' on its resources, which in turn delayed the closing of its books and timeline for audit completion. It also faced difficulties making timely audit fee payments as the claims made by the landlords on bankers' guarantees, which added up to about S$2 million, 'required urgent settlement within a short period, creating unforeseen cash demands', mm2 Asia said. The firm also disclosed then that the sum owed to various landlords for its cinema outlets had ballooned to about S$10.26 million, with around S$3.07 million backed by corporate guarantees issued by the company. 'These liabilities arose primarily from the closure of loss-making branches during the post-pandemic recovery period and the continued cash flow constraints affecting the cinema business,' mm2 Asia said in the May 19 bourse filing. The firm has since been granted the extensions, including for its FY2025 earnings report, which it now must announce by Aug 28. As part of efforts to strengthen its financial position and improve cash flow, mm2 Asia announced on Jul 4 a proposed placement of 1,875 million shares at a minimum of 0.8 cent per share, to raise funds for debt repayment and working capital. If fully subscribed at the minimum price, the placement will raise S$14 million in net proceeds, of which S$7.5 million will be used for the repayment of debts and liabilities, and the remaining S$6.5 million set aside as general working capital. Shares of mm2 Asia closed unchanged at S$0.007 on Wednesday.
