mm2 Asia to sell Cathay cinema business for SG$84.8m

MM2 Asia, operating under the Cathay brand, is selling its cinema business to local investment firm Kingsmead Properties for SG$84.8 million. As the pandemic continues in Singapore, the challenges of sustaining a business take their toll on the tourism and entertainment sectors. The cinema business has been a strategic part of mm2 Asia's content creation and distribution business, said founder and executive chairman, Melvin An. The proposed sale will stabilise the group's financial situation and allow the company to focus on its core business of movie production and content creation.

The company operates eight cinemas in Singapore and 13 in Malaysia, according to The Straits Times. The sale is subject to mm2 Asia shareholders' approval in an extraordinary meeting. Additionally, it also requires approval from applicable regulators and the execution of a shareholder’s agreement between mm2 Asia and Kingsmead. Jasmine Foo is the sole shareholder and director of Kingsmead Properties. Proceeds from the proposed deal will be used to pare down the group's borrowings, including convertible bonds due on 31 December. After deducting all the transaction costs and expenses, the company expects to receive net proceeds of approximately SG$67.34 million.

Earlier this month, mm2 Asia Group entered the influencer marketing space via a collaboration with StarNgage, a player in the KOL and influencer analytics scene. Through this partnership, advertisers can connect with bigger names and celebrities, as well as access mm2’s content production faculties, such as DoubleM Productions, which specialises in commercial and corporate videos for direct clients and ad agencies, and news platform AsiaOne.

In 2021, the company had a 4.6% year-on-year increase in revenue for other segments during the 2021 financial year (FY 2021). The other segments comprise media advertising, news agency activities, development of software for interactive digital media, brand consulting services, streaming of digital films, and short video content. Despite the reduced seating capacity allowed in the cinema and other COVID-19 safe management measures, the revenue for Singapore has improved since the beginning of the second half of FY2021.

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