[SINGAPORE] Embattled cinema chain Cathay Cineplexes has received more repayment demands – this time, a sum exceeding S$3.3 million in rental arrears and for other items, owed to the landlords of its outlets at Century Square and Causeway Point.
These include two statutory demands received on Tuesday (Jul 15), for the payment of S$86,142.31 and S$643,064.36 owed for the lease of its Century Square outlet.
A third statutory demand was received the same day for the sum of S$2.6 million, owed for the lease of its Causeway Point outlet, said its parent company mm2 Asia in a bourse filing on Wednesday.
Cathay Cineplexes has three weeks – by Aug 5 – to pay the full amount, or to secure or compound the above sums to the reasonable satisfaction of the landlord, Frasers Centrepoint Trust.
If the cinema chain fails to comply, it shall be deemed to be unable to pay its debts under the provisions of the Singapore Insolvency, Restructuring and Dissolution Act, the company said.
The Cathay Cineplexes board and mm2 said they are seeking legal advice, and intend to engage with Frasers to explore all available options. This announcement comes shortly after the company received a statutory demand for S$7.6 million from Linkwasha Holdings on Jul 9.
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The amount owed was related to a loan Linkwasha extended to mm2, for the media company to partially finance its acquisition of the cinema chain from Cathay Organisation.
Linkwasha, a related entity of Cathay Organisation, extended a loan of S$30 million to mm2, for the acquisition worth S$230 million.
As at the date of the statutory demand, mm2 said it had repaid most of the loan, and that the outstanding amount, including interest, was S$7.6 million.
On Jul 2, the cinema chain received a statutory demand from the landlords of its shuttered outlet in Jem shopping mall, asking that it pay up arrears of around S$3.4 million by the end of the month.
In a separate announcement, mm2 said it has proposed to amend a S$54 million bond deal that was set for redemption in December.
In a non-binding memorandum of understanding with its bondholder, the company seeks to extend the bond maturity date by six years to Dec 30, 2031, among other suggested changes.
This would allow it to avoid imminent default while paying higher interest at 6 per cent a year, compared with the original 5 per cent a year.
The bondholder will also no longer be entitled to 60 per cent representation on the board of mm Connect, and shall instead be entitled to appoint one director.
Furthermore, the bondholder will no longer have the right to transfer all the shares of mm Connect and its subsidiaries to himself in lieu of payment of any outstanding sum.
The company said the amendments are necessary to preserve cash and avoid risk of default.
The changes will also give it control and ownership of mm Connect through a longer runway to explore strategic options and maximise the value of its businesses and assets.
Shares of mm2 Asia ended Wednesday at S$0.007, up S$0.001 or 16.7 per cent.
