Golden Village-Cathay merger proposed; will become Singapore's most significant cinema operator if approved
10 December, 2020
Media enterprise mm2 Asia, which owns eight cinemas beneath the Cathay manufacturer, announced on Wednesday (Dec 9) it has entered right into a Heads of Contract for the possible merger of its cinema organization with Golden Village cinemas in Singapore, which is owned by Orange Sky Golden Harvest Entertainment.
The merger would help to make the combined business the major cinema operator in Singapore.
mm2 Asia, a Singapore-listed organization, also operates 14 cinemas in Malaysia under Cathay Cineplexes Malaysia, Mega Cinemas and Lotus Fivestar makes.
Orange Sky Golden Harvest owns 14 Golden Village cinemas found in Singapore and is listed on the Hong Kong Stock Exchange.
It would provide "advantageous economies of scale" and more financial and operating steadiness to the mm2 cinema organization, given the issues faced by cinema operators because the begin of COVID-19 outbreak, the business said in a good filing with the Singapore Exchange.
There has been "general disruption to the movie and cinema organization, with the advent of content streaming software and the progress of video content in social media", mm2 Asia said.
"The merger would result in a more powerful platform for the procedure of the cinema organization," it added.
Under the deal, both sides are hoping to bring in one or more new investors to inject capital in to the merged organization, which would provide "additional functioning capital for the combined organization to meet, amongst others, its operating costs, and fortify the balance sheet of the combined organization".
DEAL NEEDS APPROVAL
The merger is subject to approval from shareholders from both mm2 Asia and Orange Sky Golden Harvest Entertainment.
It also requires authorization from the Singapore Exchange and Hong Kong Stock Exchange, as well as government authorities like the Competition and Client Commission of Singapore.
"If the conditions of the Definitive Agreements cannot be agreed, or the circumstances for the Proposed Transaction satisfied, by 31 Dec 2021, the Heads of Arrangement will terminate and neither get together will have any more rights or obligations thereunder," mm2 Asia said.
IPO LISTING
Before this month, mm2 Asia also announced strategies for a possible spinoff of its cinema organization by using a listing in the Catalist board.
It is becoming proceeded with found in parallel with the work on the proposed merger, mm2 Asia said on Wednesday.
If the listing is completed successfully, mm2 and Orange Sky Golden Harvest Entertainment will discuss "in good faith the foundation which the merger and proposed deal would take place, considering the listed spinoff organization".
mm2 Asia also explained the two sides are discussing the financial conditions based on operating statistics from financial year 2019, subject to mutually agreed adjustments.
Source: www.channelnewsasia.com
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