mm2 Asia's deal with Kingsmead Properties for sale of cinema business falls through

THE sale and purchase agreement between mm2 Asia 1B0 : 1B0 0%and local investment firm Kingsmead Properties for the former's cinema business has fallen through, the entertainment company announced on Monday (Jan 3).

Kingsmead has chosen to exercise its exchange right, and will instead exchange its deposit of S$6 million into 75 million newly issued mm2 shares at a share price of S$0.08 per share.

Shares of mm2 Asia last closed S$0.001 or 1.9 per cent lower at S$0.051 on Dec 31.

mm2 Asia - which operates cinemas under the Cathay brand - previously announced that it had inked a deal with Kingsmead to sell its cinema business for S$84.8 million. The proposed sale was to be completed by Dec 31.

However, Kingsmead said uncertainty surrounding the Omicron variant has dampened investor appetite "for the moment", though it acknowledged that the cinema business in Singapore and worldwide has shown a strong turnaround in recent months.

"We hope to be able to revisit the acquisition again, and hopefully soon enough, when the Covid situation further eases," it said.

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Melvin Ang, mm2 Asia's founder and executive chairman, said the company welcomes Kingsmead as a valuable strategic shareholder and will welcome any new proposal from the investment firm in the future.

"The Omicron effect on investing sentiment was sharp and unexpected. However, mm2 remains optimistic about the recovery of the cinema business as signs are indicating a trend towards recovery," he added.