Cathay Cineplexes gets letters of demand for around S$2.7 million in rent, other costs owed

SINGAPORE: Cinema chain Cathay Cineplexes has been issued letters of demand requiring payments of about S$2.7 million (US$2 million) in rent and other costs owed in relation to its operations at Century Square and Causeway Point.

In a bourse filing on Monday (Feb 3) night, mainboard-listed media company mm2 Asia, which owns and operates Cathay Cineplexes, said it received the letters on Jan 28 from lawyers representing the landlords of the two movie theatres.

The letters allege that Cathay Cineplexes owes Century Square LLP S$431,494.53 in rental arrears and other amounts, and legal costs of S$446.90 for the lease of its premises at the shopping mall in Tampines.

Cathay Cineplexes has also been asked to pay S$47,691.21 in rental arrears and other amounts, as well as legal costs of S$446.90, to Century Square's Management Corporation Strata Title.

Both landlords have asked for payment by Feb 10.

The letters also allege that Cathay Cineplexes owes S$2,203,677.85 in rental arrears and other amounts, and S$555.90 in legal costs to the landlord of its cinema at Causeway Point.

Of the sum, S$1 million was to have been paid to HSBC Institutional Trust Services, which is the trustee of Frasers Centrepoint Trust (FCT), by Monday. FCT, which owns the shopping centre in Woodlands, also asked for the rest to be paid by Feb 10.

A letter of demand, usually sent by lawyers, contains a list of demands. If the recipient - in this case, Cathay Cineplexes - does not meet these demands, legal action, such as a lawsuit, may follow.

The board of mm2 Asia said it is "actively engaging" with the three landlords to "resolve the matter promptly and amicably" and to prioritise "minimal disruption to business operations".

It added that it is seeking legal advice over the letters of demand, including a possible restructuring of Cathay Cineplexes' business and financial obligations.

The company said it will make further announcements when there are material developments.

SEVERAL CLOSURES IN THE PAST FEW YEARS

In June 2024, Cathay Cineplexes shuttered its business in AMK Hub, its fourth cinema closure in two years.

Outlets at Orchard Cineleisure, the Cathay Building and Parkway Parade have also shuttered.

The chain did, however, acquire WE Cinemas' 321 Clementi outlet in October last year, with mm2 Asia's executive chairman Melvin Ang then saying the deal showed the "continued confidence in the cinema business and our steadfast belief that blockbusters will return to our screens soon".

Deadpool & Wolverine, the second biggest film last year, was a notable absence from Cathay Cineplexes' slate of films in 2024.

This was a "business decision", a Cathay Cineplexes spokesperson then told CNA. Other Disney offerings like last year's Inside Out 2 were also not screened at Cathay Cineplexes.

Cathay Cineplexes currently has five outlets in Singapore. Besides Century Square and Causeway Point, the chain also operates movie theatres at Downtown East, West Mall and JEM.

Shares of mm2 Asia closed at S$0.011 on Monday before the bourse filing. Shortly after opening on Tuesday, they edged up to S$0.012 before going back to S$0.011 by noon.