Yoma eyes merg­ers

The Myanmar Times - - Front Page - STEVE GIL­MORE s.gil­more@mm­times.com

Sin­ga­pore-listed Yoma Strate­gic Hold­ings is re­struc­tur­ing tourism as­sets as it seeks to strengthen its foot­ing in the lo­cal in­dus­try.

YOMA Strate­gic Hold­ings is re­struc­tur­ing its tourism as­sets and plans to cre­ate a new Myan­mar tourism-fo­cused firm that will merge with other play­ers in the sec­tor and po­ten­tially list on the Sin­ga­pore ex­change, Yoma’s chief ex­ec­u­tive told The Myan­mar Times.

The com­pany an­nounced on Septem­ber 2 that it had bought the re­main­ing 25 per­cent it did not own in a tourism sub­sidiary – Chind­win Hold­ings – that op­er­ates, among other ven­tures, a pop­u­lar air-bal­loon busi­ness in Ba­gan.

But the pur­chase is only part of a wider re­struc­tur­ing that will see Sin­ga­pore-listed Yoma Strate­gic spinoff its tourism as­sets into a new en­tity.

“We feel that tourism [in Myan­mar] is a very sig­nif­i­cant op­por­tu­nity but re­quires ded­i­cated man­age­ment and ex­per­tise,” said chief ex­ec­u­tive Melvyn Pun, “At Yoma we’re not ready to scale up to that, so in set­ting up a new com­pany our in­ten­tion is to merge our as­sets [with those of other firms].”

Yoma Strate­gic has al­ready put in place a ded­i­cated man­age­ment team for the new en­tity, and has un­der­con­struc­tion ho­tel projects that will be trans­ferred to the new firm. Mr Pun says the plan is to con­struct ho­tels in key tourist cities, and to build smaller ho­tel projects in less well­known des­ti­na­tions.

“It’s not that we want to be in the high-end or any [spe­cific] part of the tourism sec­tor,” said Mr Pun. In­stead Yoma is look­ing to cap­i­talise on the broad range of tourism ex­pe­ri­ences, from cruises to bal­loon rides, from cities to vil­lages. The new com­pany will mar­ket its tourism busi­nesses un­der an undis­closed “uni­fy­ing brand”, which the firm is in the process of de­vel­op­ing, Mr Pun said.

The com­pany is seek­ing Myan­mar In­vest­ment Com­mis­sion (MIC) ap­proval for sev­eral tourism-fo­cused projects that will run un­der the new en­tity, and has its eye on po­ten­tial part­ners en­gaged in al­ready-ap­proved tourism ven­tures, Mr Pun added.

Yoma Strate­gic will ini­tially re­struc­ture its tourism-as­sets into a Yoma con­trolled ven­ture, which will then merge with other firms and share­hold­ers. The re­sult will be that over time Yoma Strate­gic will own “a smaller stake in a larger tourism plat­form”, said Mr Pun.

He said Yoma hopes to an­nounce fur­ther de­tails of merg­ers and the new tourism en­tity in com­ing months.

One op­tion is to have the new tourism-fo­cussed firm list in Sin­ga­pore, which has the ad­van­tage of draw­ing ad­di­tional cap­i­tal, he said. The other is to have the firm stay un­listed in the short to medium term and rely on pri­vate eq­uity funds or in­di­vid­ual in­vestors, “with the aim of get­ting listed two or three years later”, Mr Pun said.

Ei­ther way the plan is to have a Sin­ga­pore-listed ven­ture, but Mr Pun also sees a Yangon Stock Ex­change list­ing fur­ther down the road. Yoma Strate­gic chair Serge Pun owns First Myan­mar In­vest­ment, which was the first com­pany to list on the YSX ear­lier this year.

FMI also holds a mi­nor­ity stake in Chind­win Hold­ings, which now owns 100pc of Bal­loons Over Ba­gan.

Po­ten­tial part­ner­ships for the new tourism en­tity will in­clude those in the ho­tel and travel agency busi­ness, the firm said. Yoma Strate­gic al­ready has ex­po­sure to the ho­tels busi­ness through its Land­mark Pro­ject in down­town Yangon, which in­cludes a lux­ury ho­tel in which Yoma has a 24pc stake. But this will be treated as a real es­tate pro­ject and is un­af­fected by the re­struc­tur­ing, Mr Pun said.

Yoma Strate­gic fo­cuses on four main busi­ness pil­lars – real es­tate, au­to­mo­tive and equip­ment, the con­sumer sec­tor, and in­vest­ments. The re­struc­tur­ing will al­low the firm to keep its fo­cus on these four pil­lars, while re­tain­ing an in­vest­ment in the lu­cra­tive tourism sec­tor, Mr Pun said. But he ex­pects the tourism en­tity to con­trib­ute less and less to Yoma’s over­all prof­its over time as its core busi­nesses grow.

Wong Yew Kiang, an an­a­lyst at Hong Kong firm Credit Ly­on­nais Se­cu­ri­ties Asia (CLSA), said the re­struc­tur­ing was un­likely to af­fect Yoma’s pop­u­lar­ity with eq­uity in­vestors. CLSA has a buy rec­om­men­da­tion on Yoma Strate­gic stock, which it said was the only way for cap­i­tal mar­ket buy­ers to gain ex­po­sure the Myan­mar real es­tate mar­ket.

Yoma Strate­gic’s shares were up 0.87pc at S$0.58 on the Sin­ga­pore stock ex­change yes­ter­day af­ter­noon.

FMI’s shares were up K500 at K20,000 at yes­ter­day’s close.

Photo: Staff

Hot-air bal­loons in­flated near the an­cient tem­ples dur­ing sun­rise in Ba­gan.

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