Changes are planned for state-owned timber companies that could see them transition to public companies – though they will likely remain partially state-owned.
Minister of Environmental Conservation and Forestry U Win Htun said it is the government’s policy to professionalise its public enterprises, although state-owned timber businesses are usually profitable every year.
“Although Myanmar businesses are changing with the market economy, [the timber industry] has not clearly changed until now,” he said. “So to complete the change to a market economy, we will open as companies in the sector as public firms. We will change all [state] enterprises to public firms eventually, or some enterprises to public firms, as possible.”
A total of 12 timber state-owned firms and 3 furniture state companies will transition to being public companies. If these transitions are successful, the remaining 69 timber companies will likewise be changed.
Although Myanmar has no modern stock exchange at present, it does allow public companies to form and raise capital through over-the-counter share sales. There is also an outdated exchange with two listed companies called the Myanmar Securities Exchange Centre.
To transition to being a public company, a business must have a minimum of seven shareholders and file a prospectus with the Directorate of Investment and Company Administration, as well as meet a number of reporting requirements.
U Win Htun made these comments at the 22nd annual meeting of the Forest Products Joint Venture Corporation (FPJVC) on November 7. FPJVC is already a public company, though the government-owned Myanmar Timber Enterprise directly controls 45 percent of the firm and the Forest Department 10pc, with the remaining 45pc owned by public shareholders.
FPJVC is also one of two companies that are listed on the existing Myanmar Securities Exchange Centre stock market. However, trading in the company’s shares is light, as the share price is capped at K20,000, though annual dividends reach K3000 – resulting in a dividend yield of 15pc, according to its 2013 annual report.
Given the high dividend yield, its owners are generally reluctant to part with the shares, particularly as they are currently capped from appreciating in value at the exchange.
U Win Htun said officials are preparing FPJVC to be able to list on the Yangon Stock Exchange slated for 2015, though he added no definite decision has been reached on whether it will join the more modern market.
Source: MYANMAR TIMES