SINGAPORE (Mar 1): In a few short years since going public, mm2 Asia now owns a chain of cinemas, a concert organiser, a visual effects studio and an online video platform.
But some investors have lost faith in mm2 ever since the company failed to buy a 50% stake in the local cinema business of Golden Village.
Instead of Golden Village, the largest cinema chain in Singapore with a 39% market share, mm2 had to settle for the acquisition of the Singapore operations of Cathay Cineplexes, which had a 27% market share.
mm2 had to fork out $230 million for Cathay – more than what it had wanted to pay for the 50% stake in Golden Village cinemas and what it paid for the cinemas in Malaysia.
Now, observers are worried about the debt incurred from its latest cinema acquisition. Ever since the Cathay acquisition, mm2 has been in a net debt position.
There are calls for the production house to take a long hard look at its cinema business — spin it off, possibly — and deleverage.
So far this year, mm2 has shed 12.5% of its value, closing at 28 cents on Feb 27.
But mm2 founder and executive chairman Melvin Ang is sticking to his guns.
“You can’t stop what you are doing because someone doesn’t like [it],” Ang tells The Edge Singapore. “You have to be rooted and committed [to growing the business]. We don’t flip businesses. We are not in corporate finance.”
Can mm2 regain its footing in its bid to become a regional media powerhouse?
Find out more in The Edge Singapore Issue 871 (week of March 4), available at newsstands now.
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