AC inks $237.5M agreement with Myanmar conglomerate

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Listed Ayala Corp. (AC) on Thursday said it has inked a landmark $237.5 million agreement with Myanmar conglomerate Yoma Group as it pursues international expansion.

The country’s oldest conglomerate said it has signed definitive agreements to buy shares in the Pun family-led conglomerate, including a 20 percent share purchase in Singapore-listed Yoma Strategic Holdings Inc. (YSH) and another 20 percent stake in Myanmar-listed First Myanmar Investment Public Co. Ltd. (FMI).

“The investment in YSH, which totals $155 million, will be implemented in two tranches –$108.6 million for 14.9 percent of the outstanding shares and $46.4 million for 5.1 percent of the outstanding shares of the company,” AC told the stock exchange.

The investment in FMI will be done via a $82.5 million convertible loan, with VIP Infrastructure Holdings Pte. Ltd. as AC’s investing entity. Upon the completion of the transaction, AC will become the second largest investor in both entities.

“Our partnership with the Yoma Group gives Ayala a unique opportunity to participate in Myanmar’s growth story. We could not imagine a better way to do this than with the Pun family, whose solid, decades-long reputation as a business house has cemented their expertise in multiple sectors such as real estate, banking, automotive, healthcare, power, and tourism, among others,” said Ayala chairman and chief executive officer Jaime Augusto Zobel de Ayala was quoted as saying.

The company noted Myanmar’s market remains underpenerated albeit emerging as second fastest growing market in the region with gross domestic product growth of more than six percent in the past three years, as its government pursues liberalization efforts.

Meanwhile, YSH and FMI executive chairman Serge Pun said the company looks forward to “leveraging (AC’s) expertise and experience to strengthen our existing businesses, and to explore potential new opportunities in Myanmar.”

The transaction is subject to the satisfaction of certain conditions, including approvals by the Singapore Exchange for YSH and the approval of Myanmar’s central bank for the convertible loan with FMI.

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