mm2 Asia faces $17.6m in legal claims, maintains it can stay afloat

Most claims are linked to its cinema unit, CCPL.

mm2 Asia is facing mounting legal claims totalling $17.6m, most of which stem from rental disputes tied to its cinema arm, Cathay Cineplexes Pte. Ltd. (CCPL). Despite the scale of the claims, the company says it remains financially stable and expects to continue operating over the next year.

The claims include $86,142.31 from MCST Plan No. 2193 and $643,064.36 from Century Square LLP, both related to Century Square. HSBC Institutional Trust Services, as trustee of Frasers Centrepoint Trust, has filed a joint claim with mm2 Asia and CCPL for $2,619,235.72 for Causeway Point. Alprop Pte. Ltd. has submitted a claim of $1,047,415.28 for West Mall.

Additionally, DBS Trustee Ltd., on behalf of Lendlease Global Commercial REIT, is claiming $3,446,748.26 for Jem, whilst Lendlease Retail Investments 3 Pte. Ltd. (in voluntary liquidation) has issued a separate $1,657,624.51 claim also tied to Jem. Resorts Concepts Pte. Ltd. has filed a demand of $557,235.58 for Downtown East. The largest claim, $7,550,500, comes from Linkwasha Holdings Pte. Ltd. and is directed at mm2 Asia itself.

In response to SGX’s concern on going concern status, the Board believes the Group can continue operations for the next 12 months. It said that only a subset of the total claims—approximately $3.1m owed to MCST, CS, FCT, and Alprop—is secured by corporate guarantees from mm2 Asia.

The company said it is also working on a $15m private placement and is in positive discussions with creditors, including a proposed bond deferral. Its core content business is performing well, cinema operations are undergoing cost reductions, and mm2 holds a strategic stake in UnUsUal Limited.

Moreover, the company also confirmed that only the claims involving MCST, CS, FCT, and Alprop are backed by corporate guarantees. All other claims are not guaranteed by mm2 Asia and are expected to be ringfenced at the CCPL level.

In the event the court directs CCPL to pay the full amounts stated in the various claims, the company believes such obligations would be limited to CCPL and would not materially impact the rest of the group.