HOMEGROWN movie producer mm2 Asia on Saturday entered into a convertible note subscription agreement with Phillip Asia Pacific Opportunity Fund to issue up to S$2.875 million in aggregate principal amount of convertible notes due June 30, 2017.
The notes, which will bear interest at the rate of 1.5 per cent per annum on the principal amount, are convertible into fully paid-up ordinary shares of the company or exchangeable into fully paid-up new ordinary shares of the cinema subsidiary, mm2 Asia said in a statement on Monday morning.
Phillip Asia currently holds 9.315 per cent of the issued share capital of mm2 Asia, and its subscription of the proposed convertible notes issue is for investment purposes only, with no intention of influencing the management of or exercising control over the company, mm2 Asia said.
It added that the subscriber is not intending to acquire additional shares in the company such that its shareholding in the company upon conversion shall reach 15 per cent or more of the enlarged issued and paid-up share capital of the company.
The estimated net proceeds from the proposed convertible notes issue, after deducting estimated fees and expenses of approximately S$85,000, is approximately S$2.79 million. mm2 Asia intends to use 100 per cent of the net proceeds of the proposed convertible notes issue for investment or acquisition purposes.
The net proceeds will be utilised in connection with the proposed acquisition from Cathay Cineplexes of cinemas in two locations in Malaysia, as announced by the company on April 30, 2015.
The counter last closed trading up 0.5 Singapore cents at S$0.455 last Friday.