PPB-owned Golden Screen Cinemas to buy Navis-backed MBO Cinemas in Malaysia

Malaysian conglomerate PPB Group’s cinema arm Golden Screen Cinemas (GSC) is acquiring the majority of the cinema assets of MBO cinemas, which is currently undergoing a voluntary winding up in the hands of creditors.

GSC said in a statement on Tuesday that it signed an agreement on Feb 23 to acquire the assets from the operators, MCAT Box Office Sdn Bhd and Reel Entertainment Holdings Sdn Bhd, which is undergoing voluntary winding-up.

The deal is expected to be completed by June but the size and value of the acquisition remain undisclosed. 

MBO is the third largest cinema chain in Malaysia with 27 cineplexes across the country, its website showed. GSC is the largest cinema chain in Malaysia. It operates 344 screens in 34 locations in Malaysia, and 108 screens in 18 locations in Vietnam through a partnership with Galaxy Studio.

The cinema business in Malaysia has been severely hit by the COVID-19 outbreak. Last year, cinemas were shut for months following the movement control orders (MCO). Despite the challenging environment, GSC said this acquisition is “strategic and will help accelerate the brand’s growth and strengthen its market leadership position”.

“We view the COVID-19 pandemic as a temporary setback and are confident that once the pandemic has passed, audiences deprived of out-of-home entertainment will return to the cinemas with a vengeance, consistent with what we have seen happen in other regions,” GSC’s CEO Koh Mei Lee said.

Private equity firm Navis Capital Partners owns 92.74% stake in MCAT Box Office via MGO NAF VI Cinematic Holdings Ltd. Businessman Abdul Rashid Abdul Manaf owns 7.26% in the firm.

Reel Entertainment Holdings, the other operator of MBO cinemas, is wholly-owned by Super Fidelity Pictures, which in turn is wholly-owned by MCAT Box Office.

Government-linked private equity firm Ekuiti Nasional Bhd (Ekuinas) is an indirect shareholder in the company through its investment in fund manager Navis Capital.

MBO Cinemas had confirmed to DealStreetAsia in October last year that the company had no choice but to go through a creditors’ voluntary liquidation as it suffered a significant impact on its revenues when cinemas were shut. “Although the company resumed business sometime in July 2020, revenue generated from the operations was significantly impacted by strict rules on social distancing and the delay of the release of most blockbuster movies to beyond 2020,” MBO Cinemas said an email.

Besides film exhibition and distribution, PPB Group’s businesses include agriculture, consumer products, and property development.

Meanwhile, Navis Capital’s fund undertook minority co-investments in MBO for an investment of 21 million ringgit in 2012, according to Ekuinas’ annual report 2012.

In September 2012, Navis reportedly acquired Reliance MediaWorks Ltd’s entire stake in BIG Cinemas in Malaysia and merged it with MBO.

In 2018, the Asia-focused PE was looking to exit the asset but had not found a buyer, The Edge reported.

It was reported in April 2012 that Navis Capital bought a majority stake in MBO for 104 million ringgit  ($25.03 million). The investment was done via a combination of existing shares from the current sole shareholder, Abdul Rashid, and new shares issued for a substantial capital injection from Navis.

Navis had not responded to DealStreetAsia’s query at press time.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.