mm2 Asia faces S$17.6 million in claims but says it can continue as a going concern

[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 “positive” negotiations with the group’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 going concern.

mm2 Asia brought in restructuring specialist Ang Chiang Meng as its chief restructuring officer as of Aug 1, saying that he is “uniquely qualified” to lead mm2’s debt management and operational reorganisation.

The company’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 “limited to CCPL” and will be unlikely to cause an impact on the rest of the mm2 Asia group.