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Singaporean entertainment mini-conglomerate mm2 Asia has finalized terms for the sale of Cathay Cineplexes, the country’s third largest cinema chain. The cinema exhibition sector has been badly hurt by closures and restrictions arising from the COVID-19 pandemic and the business will be sold at a loss of S$85 million ($63 million).

In a regulatory filing, mm2 said that it would sell at least 80% of the business in its mm2 Connect segment to Kingsmead Properties, a sole proprietorship company belonging to investor Jasmine Foo Mei Ling.

With the unit now valued at S$84.8 million ($63 million), mm2 will receive S$67.3 million ($50.1 million) net, after costs. That compares with the S$230 million ($171 million) it paid for the eight-venue business in November 2017.

Mm2 will book a loss of S$84.7 million, representing the difference between the sale proceeds and the previous valuation of mm2 Connect in mm2 Asia’s accounts. The net book value of the cinema business was reported as S$152 million ($113 million).

The proceeds will be used to reduce borrowings, repay convertible bonds due in December, and shore up mm2 Asia’s balance sheet. Earlier this year, auditors issued a going concern notice for the group.

“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. 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” said mm2 Asia’s founder and executive chairman, Melvin Ang in a statement.

The filing revealed that the Singapore cinema chain lost S$66.8 million ($49.7 million) in the financial year to March 2021.

Some cinemas in Singapore are now beginning to reopen after a recent period of restrictions. Cathay Cineplexes recently said that from Aug. 12 it would operate at least two theaters in each of its multiplexes uniquely for patrons who are fully vaccinated. The chain would also be able to sell food and drink in those halls.