Ayala invests $237.5 M for foothold in Myanmar

Ayala Corporation is investing a total of $237.5 million for the acquisition of minority stakes in two firms with extensive business interests in Myanmar: Singapore-listed Yoma Strategic Holdings Inc. (YSH) and First Myanmar Investment Public Co. Ltd. (FMI).

In a disclosure to the Philippine Stock Exchange, Ayala said it has signed definitive agreements to acquire a 20 percent stake in YSH and another 20 percent FMI.

Ayala Corporation
Ayala Corporation

The investment in YSH, which totals $155 million, consists of two tranches – $108.6 million for 14.9 percent of the outstanding shares, which was completed on December 2, 2019, and $46.4 million for 5.1 percent of the outstanding shares of the company, which shall be completed at a later date.

On the other hand, the investment in FMI will be via a $82.5 million convertible loan, which was disbursed on January 23, 2020, following the completion of the conditions for disbursement, including the approval by the Central Bank of Myanmar of the convertible loan.

VIP Infrastructure Holdings Pte. Ltd. will be the investing entity of Ayala.

The completion of the second tranche of the YSH transaction is subject to the satisfaction of certain conditions precedent, including approvals by the Singapore Exchange of the listing of the YSH shares to be subscribed to.

“The transaction supports Ayala’s strategy to pursue international expansion opportunistically, particularly in markets and sectors where it can bring its strengths and expertise,” the Philippine conglomerate said.

It noted that, “Myanmar is an under penetrated frontier market with a promising economic growth story, supported by its government’s broad liberalization initiatives.”

As a diversified conglomerate in Myanmar with overlapping interests in real estate, power, financial services, automotive, and healthcare, YSH and FMI (Yoma Group) will serve as Ayala’s main platform for strategic investments in Myanmar.

Listed on the Main Board of the Singapore Securities Exchange Trading Limited, YSH is a leading business corporation with a diversified portfolio of businesses in real estate, consumer, automotive, and heavy equipment, financial services and investments in Myanmar.

Together with its Yoma Group partners, Yoma Strategic is taking a conglomerate approach to build a diversified portfolio of businesses in Myanmar.

The company was ranked in the top 5 percent of the Governance and Transparency Index 2019, ranked 26th out of top 100 largest Singapore companies in the ASEAN Corporate Governance Scorecard 2017 and won the Best Managed Board (Gold) Award at the Singapore Corporate Awards in 2016.

FMI is one of Myanmar's largest public companies with over 8,000 shareholders and an unbroken track record of profitability since inception in 1992.

Its current focus is on its “four pillar” strategy of investing in the financial services, real estate, healthcare, and tourism sectors. FMI became the first company to be listed on the Yangon Stock Exchange on March 25, 2016.