The rent-owed storm continues to burn more than 10 million yuan, and the parent company of Cathay Theater delays the release of financial reports

mm2 pointed out that no owner has formally taken legal action and the company is actively negotiating solutions.

The company also said that it is preparing annual financial statements based on the premise of continuing operations. Its content production business has performed optimistically in China, Malaysia and other Asian markets, especially in Malaysia's local film market.

Cathay Pacific Cinema has closed two theaters this year and six since 2022. Among them, the theater at Jem Shopping Center in Jurong East will be closed from March 27 due to rent arrears.

According to the announcement issued by mm2 after the closing of the market on Monday (May 19), the company has applied for a maximum of 90 days to extend the unaudited financial report that was originally required to be released before May 30 to August 28; the shareholders' meeting originally scheduled to be held before July 31 is expected to be postponed to October 29. At the same time, the company is also seeking to delay the submission of annual reports and sustainability reports to shareholders and exchanges.

However, the theaters that are still operating are not in good condition. In February this year, Cathay Pacific Cinema received a letter from lawyers, and was asked by the owner to pay the rent and attorney fees arrears at Tampines Century Plaza and Woodlands Changdifang, a total of nearly 2.7 million yuan.

As of Monday, the total amount of overdue rent liability related to Cathay Pacific Cinema, a subsidiary of mm2, reached 10.26 million yuan, of which about 3.07 million yuan involves corporate guarantees provided by the parent company. These debts are mainly caused by the closure of theaters after the epidemic and tight cash flow.

Cathay Pacific Cinema's rent-owed storm continues. The parent company mm2 Quanya Film and Television Entertainment announced that it has applied to the Singapore Exchange (SGX) and the Accounting and Enterprise Control Authority (ACRA), requesting the delay in the release of a number of reports for the fiscal year ending March 2025 and postponing the annual shareholders' meeting. The company also disclosed that Cathay Cineplex has owed a total of 10.26 million yuan in rent.

mm2 has also applied to the Accounting and Enterprise Control Bureau to postpone the shareholders' meeting and submit an annual return under the Company Law, and plans to apply for an additional 30 days of extension later.

There are only four theater stores left

However, the company said that if consultations with local owners cannot be completed smoothly, the ability to continue operations in the future may be significantly affected. To address this risk, the company and the Cinema have hired legal and financial advisers to assist in the restructuring and negotiations.

On February 20 this year, Cathay Pacific Cinema, located in West Mall, Bukit Batoshi, was closed. The company has only four cinemas left in the local area, located in Causeway Point, Downtown East, 321 Clementi of Century Entertainment Center and Century Square.

The mall owner Lianshi Global Commercial Real Estate Investment Trust (Lendlease  Global Commercial REIT) also recovered 4.32 million yuan of rent arrears while issuing a termination notice to Cathay Pacific Cinema.

The company explained that the reasons for the delay include that legal disputes related to theater leasing affect the progress of asset impairment assessment, and the claims of theater owners forced management to mobilize resources to respond, which affected the audit work. In addition, the group needs more time to deal with complex accounting projects, such as impairment, fair value adjustments and legal reserves.