Invest in Myanmar - For Investors Seeking Opportunities in Myanmar
Invest Myanmar - The Myanmar Investment Gateway
General Information about Myanmar (1)
Business (131)
FDI in Myanmar (45)
Investments (59)
Macroeconomic Data (4)
Infrastructure (4)
Financial (17)
Economy (37)
Construction (1)
Politics (29)
Real Estate (1)
Investment Legislation (3)
Sports (1)
Telecommunications (27)
Law (14)
Infrastructure (20)
Education (2)
Banking (19)
Jewellery (1)
Stock Market (2)
Agriculture (35)
Real Estate (22)
Mining and Exploration (10)
Construction (29)
Energy (47)
Textile and Fashion (10)
Tourism (23)
Information Technology (11)
Food and Beverage (13)
Electronics (3)
Waste Management (1)
Automotive (9)
Logistics (4)
Renewable Energy (0)

Myanmar-focused Yoma raises $82 million from placement

Date: 22/09/2010
Source: Finance Asia
Myanmar-focused Yoma raises $82 million from placement

Yoma Strategic Holdings, a Singapore-listed company focusing on real estate, agriculture and car sales in Myanmar and China, has raised S$101.2 million ($82 million) from a placement of new shares.

The offering coincided with President Barack Obama’s half-day visit to Myanmar yesterday, taking advantage of the positive headlines and the boost in optimism about the country’s reform process that surrounded his trip.

Early yesterday, Yoma also announced that it had agreed to buy 80% of a company that holds the rights to develop a 10-acre site in downtown Yangon. Yoma said it will pay $81.28 million to acquire the stake from a company owned by its chairman and controlling shareholder, Serge Pun, subject to approval from its shareholders.

The site includes the city’s former railway headquarters that was built in 1877 and which will be restored to its original Victorian-era grandeur and converted into a landmark five-star hotel rivalling the Raffles Hotel in Singapore. The rest of the site will become home to a mixed-use development of residential, retail, hospitality and commercial properties, spanning some 2 million square feet of gross floor area.

The total cost of the development is estimated at between $330 million and $350 million.

The placement proceeds may be used to cover part of that and Yoma said it may also explore a potential debt issue. However, the acquisition cost will be funded through a proposed one-for-four rights issue that will be offered at a 25% to 35% discount to the market price at time. Chairman Pun has agreed to take up his own 50.1% entitlement and will also buy any other right shares that are not subscribed by minority shareholders, up to the total acquisition price of $81.28 million.

This would have given investors confidence that the development project will actually happen and according to a source, yesterday’s placement attracted quite a lot of interest — despite the fact that Yoma’s share price has already risen 220% this year. Because most hard assets in Myanmar can only be owned by domestic investors, Yoma offers a unique opportunity to participate in a significant real estate project in the country, the source said.

“This landmark development will be an iconic destination which will lead the way in Myanmar,” said Yoma’s CEO, Andrew Rickards. “The provision of first-class hotel rooms, offices, apartments and retail is badly needed in the capital to cope with the dramatic increase of interest in the country. The availability of land in central Yangon is extremely limited and the right of refusal for this 10-acre site from the SPA Group presented a stunning opportunity for Yoma.”

To be sure, the placement was well supported before launch following a wall-crossing exercise by the bookrunners last week. One US-based long-only investor had agreed to buy half the deal and together with a few more anchor investors, the deal was essentially covered when the order books opened at 1pm Hong Kong time yesterday.

At the end of the six-and-a-half-hour bookbuilding, more than 35 investors had submitted orders, showing that there is quite a lot of appetite for the region’s latest frontier market. However, about 75% of the shares went to the top-five investors.

Yoma offered 192.8 million new shares at a price between S$0.515 and S$0.53 each. The price translated into a discount of 5.4% to 8% versus Friday’s closing price of S$0.56 (the stock was suspended yesterday), or a 6.1% to 8.7% discount versus Friday’s volume-weighted average price (VWAP). As per Singapore regulations, the discount on primary share issues cannot be set wider than 10% versus the previous day’s VWAP.

As an indication of the interest, the price was fixed towards the top of the range at S$0.525, which represented a discount of 6.9% versus Friday’s VWAP and 6.3% versus the close on that same day.

The offering accounted for 20% of the existing share capital, which was the most the company could issue without additional approval from shareholders.

The buyers included a mix of long-only investors and hedge funds as well as some wealth management funds. The deal was done on a Reg-S basis, but did attract some interest from offshore US accounts. However, most of the demand came from Asia, followed by the US and then Europe.

Investors who bought shares in the placement will also have the right to participate in the rights offering, which will take place after shareholders have been given the chance to approve the acquisition. At present both the extraordinary shareholders meeting and the rights offering are expected to happen in the first quarter next year.

The placement was arranged by DBS and UBS.

Prior to Obama’s historic visit to Myanmar, the US administration removed a near decade-old ban on most imports from Myanmar and in a note issue yesterday, Mandalay Capital said it believes that the US president’s visit, along with Myanmar’s recently approved foreign investment law, will provide a powerful catalyst for US companies and institutions to invest significantly in Myanmar in coming years.

“We expect US multinational companies from the oil & gas, energy, infrastructure, consumer goods, and financial services [sectors], such as Chevron, ExxonMobil, GE, Caterpillar, Coca Cola, PepsiCo, P&G, Visa, Mastercard and the Wall Street investment banks, to be particularly active in Myanmar,” Mandalay Capital said.

“By strongly supporting the Myanmar government’s bold political and economic reforms, the US is encouraging its European and Asian allies and partners as well as multinational organisations (the IMF, World Bank, Asian Development Bank) to re-engage actively with Myanmar,” the Myanmar-based firm added.

Separately, but perhaps riding on the same positive news flow surrounding the Asean region, the controlling shareholder in NagaCorp raised HK$398.7 million ($51 million) from a block trade last night. The company is listed in Hong Kong, but operates a casino in Cambodia.

This was the second time this year that Chen Lip Keong, the founder, controlling shareholder and CEO of NagaCorp reduced his stake, following an $84 million deal in April. However, the proceeds from that first sale were intended to be used for the development of a second casino that will eventually benefit the listed company.

Last night’s trade comprised 90 million shares, which accounted for 4.3% of the share capital and will reduce Chen’s stake in the company to 45.7% from 50%. The shares were offered at a price between HK$4.43 and HK$4.60, which represented a discount of 3.4% to 6.9% versus yesterday’s close of HK$4.76.

A source noted that most of the demand came in at the bottom of the range, which was no surprise really, given that the stock has rallied 143% so far this year and closed at a five-year high yesterday. It is up 6% in the past three days alone.

But even though the price was fixed at the bottom of the range for a 6.9% discount, this is still well below the 15% discount that the seller had to concede in April.

The deal attracted good demand from US and European investors who had met with the NagaCorp management during a Morgan Stanley conference in Singapore last week, the source said. The buyers included a combination of long-only funds and hedge funds.

Morgan Stanley was the sole bookrunner for the offering.

© Haymarket Media Limited. All rights reserved.

Topic: Construction
Did You Know?
Literacy Rate in Myanmar is 83 per cent and life expectancy is 57 years. ... More

Featured news story
Myanmar To Select Foreign Energy Companies To Explore 30 Offshore Blocks From 61 Shortlisted Companies
Myanmar To Select Foreign Energy Companies To Explore 30 Offshore Blocks From 61 Shortlisted Companies

Featured Video
BEST NEWS : Reform brings business to Myanmar - Invest video
BEST NEWS : Reform brings business to Myanmar

GDP 2010 USD 45.4 B
GDP 2012 USD 54.0 B
Inflation 9.13 %
Unemployment Approx. 35%
GDP growth 2011 5.5 %
FDI 2011 USD 1.05 B
Today on Invest Myanmar
Member Companies: 82
News Stories: 341
Myanmar Videos: 59
Interesting Facts: 29
Factsheets: 9
  Copyrighted 2012 Invest All rights reserved.  

Please read Conditions of Use, Copyright Statement and Privacy Policy for this web page and web site.

Crafted by Sofia Web Works, makers of Pahraat Kasinot and Casinobonus p alla svenska online casinon an Invest Bulgaria company