'No longer feasible' to continue operating as Cathay Cineplexes plans liquidation

Entertainment company mm2 Asia on Sept 1 announced that Cathay Cineplexes will undergo voluntary liquidation.

The struggling cinema chain, which owes money to the landlords of several of its outlets, is unable to continue operating as a going concern, its parent company said.

"Cathay Cineplexes had attempted to negotiate amicable resolutions with the various creditors, but (it) was unable to arrive at mutually agreeable restructuring outcomes of its payment obligations owed to these creditors," mm2 Asia said.

The board of Cathay Cineplexes will proceed with a creditors' voluntary liquidation of the cinema chain, after determining that it is "no longer feasible" to continue operating as a going concern, the media company said.

An extraordinary general meeting of the members of Cathay Cineplexes and a meeting of its creditors will be convened in due course.

mm2 Asia's statement named as claimants DBS Trustee, the trustee of Lendlease Global Commercial Reit; the landlords of Century Square mall, Management Corporation Strata Title Plan No. 2193 and Century Square LLP; HSBC Institutional Trust Services (Singapore), the trustee of Frasers Centrepoint Trust (FCT); Lendlease Retail Investments 3 (in members' voluntary liquidation); Alprop and Resorts Concepts.

These include the landlords of Cathay Cineplexes' outlets at malls such as Century Square, Causeway Point and Jem.

In recent months, the cinema chain received millions in payment demands from landlords of its outlets over rental arrears and other monies owed. This came alongside a string of closures of its cinema outlets.

In February, it received payment demands for around $2.7 million from the landlords of its Century Square and Causeway Point outlets. Both malls are owned by FCT.

The landlord of its Jem outlet, Lendlease Global Commercial Reit, issued a $3.4 million payment demand in July.

Alprop submitted a claim of around $1 million for the West Mall outlet which closed in February, on behalf of the mall's landlord UOL Group.

mm2 Asia said in July that it was mulling over the closure of the cinema chain, as the industry has faced challenges since Covid-19.

Six Cathay Cineplexes cinemas have closed in the last three years, leaving four still in operation at Causeway Point, Century Square, Downtown East and 321 Clementi.

For its last financial year ended in March, mm2 Asia posted a net loss of $105.2 million, widening the $5.7 million loss it incurred in the year-ago period.

Shares of mm2 Asia were trading unchanged at 0.4 cent as at 10.23am on Sept 1, after the news about Cathay Cineplexes. THE BUSINESS TIMES