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MM2’s Singapore Cinema Sale Collapses as Investor Blames Omicron Impact

MM2’s Singapore Cinema Sale Collapses as Investor Blames Omicron Impact
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Mini-Conglomerate MM2 Asia says a deal to sell its movie business in Singapore has failed. The deal was announced in August and was supposed to be completed by December 31, 2021.

“Omicron’s uncertainty has dampened investment appetite at the moment. We hope we can reconsider the acquisition again, and hopefully soon enough, when the Covid situation calms down further,” potential buyer Kingsmead Properties said in a statement.

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Privately owned Kingsmead originally agreed to pay S$84.8 million (US$62.5 million) for an 80% stake in the Cathay Cineplex branded unit. She paid a S$6 million ($4.43 million) deposit, which will now convert her into 75 million newly issued MM2 shares instead.

“welcome [Kingsmead] As valuable strategic contributors,” MM2 CEO Melvin Ang said. “Omicron’s impact on investment sentiment has been severe and unexpected. However, MM2 remains optimistic about the revival of the cinema business as indications are that there is a trend towards recovery. We certainly will continue to welcome any new proposal from Kingsmead in the future.”

Kathy Cineplexes stated that December 2021 was her best month since the start of the pandemic, and cited the pre-Christmas release of “Spider-Man: No Way Home” as a decisive factor. The Singaporean movie chain lost 66.8 million Singapore dollars ($49.3 million) in the fiscal year ending in March 2021.

The conversion price of SG$0.08 is significantly higher than the previous price of SG$0.051 as SGX-listed MM2 shares ended 2021 and prior to disclosure. On Tuesday, mm2 shares jumped higher.

Crystal’s planned disposal of mm2 could have seen a significant loss – it paid S$230 million to the eight-place circuit in November 2017 – but the proceeds would have helped support the company’s balance sheet by reducing borrowing and allowing it to repay the convertible bonds that were Due in December. Earlier in 2021, the auditors issued a going concern notice to the group.

The film industry has been a strategic part of the group’s content creation and distribution business, but has been affected by Covid-19. With this proposed sale, this will stabilize the financial position of the group and allow MM2 to continue to focus on developing and enhancing the core production content and growing opportunities.”

Production subsidiary MM2 Entertainment announced last month that production had begun for Geylang, a crime thriller set in Singapore’s red-light district.

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