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- 🤯 Cathay Cineplexes: S$230M Buyout Killed Singapore's 90-Year Cinema Legacy
🤯 Cathay Cineplexes: S$230M Buyout Killed Singapore's 90-Year Cinema Legacy
How a S$230M leveraged buyout, COVID-19's revenue collapse, and unsustainable mall rents buried Singapore's 90-year cinema pioneer.
Admond Lee
June 14, 2026
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Hey Founders,
Welcome to The Runway Ventures — a weekly newsletter where I deep dive into failed startup stories to help you become the top 1% founder by learning from their mistakes with actionable insights.
Today's story is about how a 90-year-old cinema icon was bought at growth multiples with debt, then crushed by COVID and streaming. Let's get to it! 🚀
Today at a Glance:
☠️ 1 Failed Startup → Cathay Cineplexes
⚠️ 2 Mistakes → Paid a peak multiple for a cyclical business on leverage
🧠 3 Lessons Learned → Map what the seller chose to keep
🔗 The Runway Insights → Why your AI bills keep exploding
💰 Southeast Asia Funding Radar → GreatAsic raises $6.9M (Pre-Series A) to build custom AI chip design capabilities as a fabless semiconductor company in Malaysia
☠️ 1 Failed Startup: Cathay Cineplexes
🚀 The Rise of Cathay Cineplexes
🇸🇬 Founded by Loke Cheng Kim, Loke Wan Tho, Khoo Teik Ee, and Max Baker in 1935, Cathay Cineplexes was Singapore's pioneering cinema chain — the brand behind the colony's first air-conditioned theatre, Asia's largest drive-in, and Singapore's first arthouse cinema.
🕺🏻🕺🏻🕺🏻🕺🏻 Founders’ Story
Cathay didn't start as a cinema company. It started as a side bet on a Loke family fortune built from tin mining and rubber plantations across colonial Malaya.
In the 1930s, Loke Cheng Kim (widow of tycoon Loke Yew) noticed Singapore had almost no proper places for people to gather and be entertained. So in July 1935, she teamed up with her son Loke Wan Tho (still finishing his studies at Cambridge), a trusted relative Khoo Teik Ee, and British family friend Max Baker to incorporate Associated Theatres Ltd.
🎬 The bet was simple → build the kind of picture palace Singapore had never seen.
The Problem — 😴 1930s Singapore had a serious entertainment gap.
Local cinemas were basic, cramped, and overheated in the tropical climate (no air-conditioned).
No premium experience comparable to what Western audiences were getting.
The Solution — 🎟️ Cathay built the most advanced movie houses Singapore had ever seen.
Opened the colony's first air-conditioned cinema in 1939 at the Cathay Building (1,321 seats).
Pioneered multi-screen "cineplexes" and integrated entertainment hubs decades later.
🇸🇬🎟️ In short, Cathay was the place where Singaporeans learned to go to the movies.
 | And for nearly a century, it worked. 🎞️ Cathay survived WWII (the Japanese seized the building and turned it into a propaganda broadcast hub). It survived the death of its visionary leader Loke Wan Tho in a 1964 plane crash. It survived TV, VHS, and cable. |
🚗 In 1971, it opened the Jurong Drive-in — Asia's largest open-air cinema, fitting 900 cars on a 5.6-hectare site. By 1997, the flagship Cineleisure Orchard had become a 12-screen downtown destination combining movies with retail, gaming, and karaoke.
🏔️ At its peak, Cathay:
ran 75 cinemas across Singapore and Malaysia in the 1970s
operated 8 Singapore locations with 64 screens and 11,569 seats at the time of sale
held roughly 18% share of Singapore's national cinema seating capacity
generated ~S$70 million annual revenue (entertainment division, 2009)
got acquired by mm2 Asia for S$230 million in 2017 at 13.8x EBITDA
That 2017 sale is where the story turns.
To ensure Cathay's future, we came to the very difficult decision to let go of the grown child, to allow it to embrace bigger and better things. I certainly hope to be around when Cathay Cineplexes celebrates its 100th Anniversary.
After 82 years of Loke family ownership, Choo Meileen (Loke Wan Tho's niece) believed Cathay needed deeper pockets, broader content, and a parent that could play the production game. mm2 Asia — a Singapore-listed media company that had recently been rejected on its Golden Village bid — stepped in and bought the whole thing.
It looked like the perfect handover.
📉 The Fall of Cathay Cineplexes
It wasn't. Because buying a cinema chain at 13.8x EBITDA with bank debt only works if the world stays normal.
🦠 And the world was about to get very abnormal.
When COVID hit in 2020, cinemas everywhere went dark. But for Cathay, the timing was uniquely brutal — they were still digesting the leveraged acquisition when revenue evaporated and rents kept compounding.
What followed was a slow-motion collapse — a failed bailout, REIT landlords issuing demand letters, and outlet after outlet going dark.
📌 Here’s what happened to Cathay Cineplexes:
When we acquired the cinemas, they were profitable. If we knew that COVID-19 was coming, then we probably wouldn't have done it.
⛏️🎬 From tin mines to silver screens
18 Jul 1935 — 🎬 Loke Cheng Kim, Loke Wan Tho, Khoo Teik Ee, and Max Baker incorporated Associated Theatres Ltd in Singapore, entirely self-funded by Loke family wealth from tin mining and rubber.
3 Oct 1939 — Opened the first Cathay Cinema at 2 Handy Road — the colony's first air-conditioned cinema with 1,321 seats. Inaugural film: 'The Four Feathers'.
20 Jun 1964 — ✈️ Founder and Chairman Loke Wan Tho died in a plane crash in Taichung, Taiwan, while returning from an Asian film festival. All 57 on board perished.
14 Jul 1971 — 🚗 Jurong Drive-in opened — Asia's largest open-air drive-in, accommodating 900 cars on a 5.6-hectare site.
Mar 1997 — 🏙️ Cathay Cineleisure Orchard opened as a 12-screen downtown multiplex combining cinemas with retail, gaming, and karaoke.
2 Nov 2017 — 🤝 mm2 Asia announced the S$230 million acquisition of Cathay Cineplexes at 13.8x EBITDA, financed largely through bank debt.
The deal closed 24 Nov 2017, ending 82 years of Loke family ownership.
🦠 Then the world stopped going to the movies
Jun 2020 — 💻 mm2 launched Cathay CineHOME, a TVOD streaming service, to make up for COVID-19 lockdowns. But it never gained meaningful traction.
FY2021 cinema and event revenues plunged 89% year-on-year; mm2 Asia posted a group net loss of S$92.7 million.
30 Aug 2021 — ⚠️ mm2 agreed to sell 80% of the cinema business to Kingsmead Properties for S$84.8 million — a 63% valuation collapse from what they had paid four years earlier.
3 Jan 2022 — ❌ Kingsmead pulled out, citing Omicron variant uncertainty. The S$6 million deposit was converted into 75 million mm2 Asia shares instead of cash.
27 Jun 2022 — The Cathay flagship at Handy Road closed permanently after 83 years. Last film screened: 'Top Gun: Maverick'.
Feb 2023 — mm2 disclosed legal letters demanding S$2.7 million in unpaid rent at Century Square and Causeway Point.
Jun 2023 — 🚪 Cathay outlets at AMK Hub (after 17 years) and Cineleisure Orchard (after 26 years) both closed within the same month.
27 Mar 2025 — ⛔ Lendlease Global Commercial REIT terminated Cathay's lease at Jem mall over S$4.3 million in unpaid rent.
15 Jul 2025 — Frasers Centrepoint Trust issued statutory demands for S$3.3 million owed at Century Square and Causeway Point.
28 Aug 2025 — 📉 mm2 Asia reported FY2025 group net loss of S$122.4 million, with UOB separately demanding repayment of S$74.6 million from mm2 and its subsidiaries.
1 Sep 2025 — 😢 Cathay Cineplexes ceased operations at all four remaining outlets and entered creditors' voluntary liquidation. Patrons arrived to find the doors locked.
🙏🏻 And just like that, 90 years of Singapore cinema history went dark.
Cathay survived WWII. It survived the death of its founder in a plane crash. It survived TV, VHS, and cable. What it couldn't survive was a leveraged buyout right before a pandemic — followed by streaming, REIT landlords with no flexibility, and a parent company drowning in debt it couldn't repay.
Choo Meileen had hoped to see the 100th anniversary. The chain made it to 90.
Want to learn more about Cathay Cineplexes’s downfall?
⚠️ 2 Mistakes
Melvin Ang (founder and executive chairman of mm2 Asia)
Mistake 1: Paying a peak multiple for a cyclical business on leverage
In November 2017, mm2 Asia paid S$230 million for Cathay Cineplexes — 13.8x FY2016 EBITDA — funded through a mix of cash, bank loans, and share issuance.
On paper it was defensible → an 82-year-old brand, Singapore's 3rd-largest chain by screens, a motivated seller. But that's a top-of-cycle multiple for a low-margin, lease-heavy business in structural decline — and the leverage left zero balance-sheet elasticity.
Then COVID hit, 2 years in:
🦠 FY2021 cinema and event revenues collapsed 89% YoY
💸 The debt didn't pause when the screens went dark
📉 By 2021 the chain fetched just S$84.8M in a distress sale — a 63% markdown in 4 years
⚖️ By 2025, UOB was chasing S$74.6M from mm2 and its subsidiaries
Mistake 2: Buying the cinema chain after the real estate was stripped out
The Loke family's 82-year run rested on an asset that never showed up in the cinema P&L: they owned the buildings — most famously the Cathay Building at Handy Road, anchoring the brand since 1939. By 2017 the operating chain had migrated into REIT-owned malls on ordinary commercial leases.
⛪️ The family sold the operating shell and kept the property.
🏢 This matters because REIT landlords — Lendlease, Frasers Centrepoint Trust — owe a fiduciary duty to maximise unit holder yields. A private landlord might flex in a crisis, but a REIT trustee legally cannot.
So when revenue collapsed, mm2 had no lever on its biggest fixed cost:
⛔ Lendlease terminated the Jem lease over S$4.3M in arrears (Mar 2025)
⚖️ Frasers issued S$3.3M in statutory demands (Jul 2025)
🧠 3 Lessons Learned
Lesson 1: Debt doesn’t pause when revenue does
mm2 paid 13.8x EBITDA for a lease-heavy, cyclical business — financed through a mix of cash, bank loans, and share issuance. That multiple only works if the world stays normal. When COVID arrived 2 years later, the cinemas went dark — but the debt didn't.
🌮 Key Takeaways:
In cyclical industries, debt eliminates the flexibility you need most when revenue collapses.
he acquirer carries the leverage. The seller walks away with the cash.
🛠️ Operator Playbook:
🧪 Stress-test the deal against a 50% revenue collapse
Before signing, model the question → "If revenue drops 50% for 18 months, can we still service the debt and the rent?"
For lease-heavy targets, treat operating lease obligations as debt-equivalent. Ignoring this is how mm2 ended up at the mercy of REIT landlords.
🎯 Apply a cycle-adjusted multiple rule
For cyclical categories (cinema, retail, F&B, travel, hospitality), use trailing 5-year average EBITDA. Last year's peak number lies to you.
If your target's EBITDA could halve in 12 months — as COVID forced on cinemas — your purchase multiple should reflect that.
Lesson 2: Map what the seller chose to keep
🏢 Cathay's 82-year run was anchored by an asset that never showed up on the income statement → the Loke family owned the buildings.
When Choo Meileen sold in 2017, she told the press the family would now "concentrate on our properties." While mm2 acquired the cinema operations, the Loke family kept the moat.
🌮 Key Takeaways:
In heritage deals, the seller often keeps the invisible asset that drove historical margins.
REIT landlords have fiduciary duties to maximise unit holder yields. They cannot give you crisis flexibility.
🛠️ Operator Playbook:
📋 Build a "what's not in the deal" diligence checklist
Map every asset and relationship that drove the target's historical margins:
Property ownership vs leased premises
Founder relationships & personal goodwill
Captive supply or distribution that depended on the seller
For each, ask → "If this disappears post-close, does the business model still work?"
🏘️ Lock in lease protection before close
Push the seller and landlords for any of:
Right of first refusal on the underlying real estate
Long-term fixed leases (5+ years) signed before close
An owner-operated cinema with real-estate equity carries a structural advantage that a REIT tenant can never replicate.
Lesson 3: Your exit vanishes exactly when you need it
🚪 When mm2 finally moved to offload Cathay, the buyer walked — and no one else stepped in. It spent the next 3 years bleeding the chain down, outlet by outlet, to the 2025 wind-up. The exit it assumed it had simply wasn't there.
🌮 Key Takeaways:
"We can always sell it" is not a plan. Assume the asset is unsellable in a crisis and ask whether you can survive holding it.
The time to engineer your exit is before you buy — not after the impairment.
🛠️ Operator Playbook:
🚪 Pressure-test the exit before you sign
For any acquisition, ask → "If this business halves in value, who realistically buys it, and at what discount?"
If the honest answer is "no one, in a downturn," you're buying a one-way door — size the position accordingly.
🧮 Model the hold, not just the deal
Build the scenario where you CAN'T exit for 3–5 years: can the parent absorb the losses, debt service, and lease obligations that whole time?
If holding the failure would impair your core business, the acquisition is too big — regardless of how good the upside case looks.
🔗 The Runway Insights
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That’s all for today
Thanks for reading. I hope you enjoyed today's issue. More than that, I hope you’ve learned some actionable tips to build and grow your business.
You can always write to me by simply replying to this newsletter and we can chat.
See you again next week.
- Admond
Disclaimer: The Runway Ventures content is for informational purposes only. Unless otherwise stated, any opinions expressed above belong solely to the author.
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