mm2 Asia has confirmed the sale of its controlling stake in its chain of cinemas. While it will collect net proceeds of $67.3 million, it will also book a loss of $84.7 million.

Under terms of an agreement signed on Aug 30, mm2 Asia will sell 80% of its cinema business to one Jasmine Foo Mei Ling, who is buying the stake via Kingsmead Properties. 

According to mm2 Asia, she manages her family business interests and previously worked in several global financial institutions.

The transaction, which requires mm2 Asia’s shareholders’ approval at an EGM to be called, values the cinemas at $84.8 million.

Back in 2017, mm2 paid $230 million for Cathay Cinema, which operated eight cinemas in Singapore.

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According to mm2 Asia, the proceeds will be used to pare down the company’s debt, including a tranche of convertible bond due on Dec 31 2021.

“The cinema business has been a strategic part of the group’s content creation and distribution business, but it has been affected by Covid-19,” says executive chairman Melvin Ang.

“With this proposed sale, it will stabilize the group’s financial situation and allow mm2 to continue to focus on the development and strengthening of core production content growing opportunities” he adds.

Mm2 Asia shares closed on Aug 30 at 5.7 cents, down 1.72% for the day and down 48.18% year to date.