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MM2 Asia seeks court protection as bank demands S$74.6 million

[image source: Business Times SG]
[image source: Business Times SG]
12 Nov - Singapore entertainment company MM2 Asia is seeking urgent court protection after being hit with a massive S$74.6 million (about RM256 million) debt demand from United Overseas Bank (UOB).

The company has applied to the High Court for a moratorium - essentially a legal shield that would stop creditors from taking action against it for four months while it tries to restructure its debts.

What is MM2 Asia?
MM2 Asia is the company behind popular local films like "Ah Boys to Men" and "Long Long Time Ago." Founded by Melvin Ang, the company also used to run Cathay Cineplexes in Singapore and mmCineplexes in Malaysia.

Back in 2017, MM2 thought buying Cathay Cineplexes would be a smart move - cinemas would bring in steady money while they continued making films. For a while, it worked great. By 2019, the company was doing really well.

Things haven't been great since COVID
Things have not gone so great since COVID-19 hit, with MM2 unable to recapture the good times after the pandemic. The cinema business kept losing money even after restrictions lifted, and the losses just kept piling up. Earlier this year, Cathay Cineplexes started closing down outlets one by one. By September, all the remaining Singapore locations shut down for good.

Seeking breathing room
On the same day it received UOB's payment demand, MM2 filed for court protection. The company said its board believes "a court-supervised reorganisation process is in the best interests of all stakeholders."

The moratorium would give MM2 a four-month window where:
  • Creditors can't force the company into liquidation
  • Legal proceedings against MM2 are put on hold
  • Banks can't seize the company's assets
  • Landlords can't kick MM2 out of any remaining premises
An automatic 30-day protection kicked in immediately when MM2 filed the application on 10 November. The company has also admitted it "is unable to demonstrate that it can continue as a going concern" - essentially saying it can't prove it can survive without help.

UOB is just the latest
UOB's demand is just the latest in a list of banks and landlords sending letters of demand to MM2. Standard Chartered Bank has also demanded repayment, while mall landlords are claiming millions in unpaid rent. Last financial year, MM2 lost S$122.4 million - that's ten times worse than the year before.

What about Malaysia?
The bad news hit Malaysia too. In late September, mmCineplexes suddenly announced it was closing all 13 locations across the country immediately. The cinema chain - which had outlets in Kuala Lumpur, Johor Bahru, Penang, Melaka and other cities - went into liquidation with barely any warning. Just days before the closure, they were still posting about new movies on social media like everything was normal.

MM2 is now hoping the court will grant its request for protection, giving it time to work out a restructuring plan with its creditors. Without this breathing room, the company faces possible bankruptcy and complete shutdown.


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