Malaysia, Singapore-backed firm acquires tourism business from Serge Pun

SHC Capital Asia, an investment holding company, is planning to acquire MM Myanmar from Mr Serge Pun’s First Myanmar Investment Limited (FMIL), a local conglomerate which is listed on the Yangon Stock Exchange, Yoma Strategic Investments and Exemplary Ventures for S$69.7 million.

SHC Capital Asia is backed by Malaysian property developer See Hoy Chan and listed on the Singapore Stock Exchange. Mr Pun’s Yoma Strategic Investments is also listed in Singapore.

MM Myanmar, which will change its name to Memories Group Limited after the acquisition, is engaged in tourism-related businesses in Myanmar. The company comprises three main business divisions – Experiences, Services and Hotels, according to SHC Capital Asia’s stock exchange filing.

The Experiences business comprises Balloons Over Bagan and Bagan Land, while Services comprises the Asia Holidays travel agency. The Hotels business comprises Hpa-An Lodge and Pun Hlaing Lodge.

If the deal is successful, Memories Group intends to market itself as a multi-service tourism company “with the aim of giving tourists a seamless and holistic tour experience in Myanmar.” It intends to take advantage of its existing local networks and the current fragmented tourism sector and leverage on its position as the first such company in the country to gain an edge over competitors.

The acquisition will be funded by issuing 265 million new SHC shares priced at 26.3 cents each following a 7:1 share consolidation exercise. Meanwhile, SHC Capital Asia will undertake a compliance placement of 93 million new consolidated shares to change the MM Myanmar moniker to Memories Group.

The move comes amid a dip in tourist arrivals to Myanmar as a result of the unfolding humanitarian crisis in Northern Rakhine. The tourism sector is expected to grow over the long term though, with growth in tourist arrivals projected to expand by 7.6pc over the next ten years, according to the Wolrd Travel and Tourism Council.

In 2015, the number of tourist arrivals in Myanmar reached 4.7 million, with the industry contributing some $1.6 billion, or around 2.6pc, to the country’s GDP.

Shares of SHC Capital Asia closed Wednesday at 4.4 cents apiece. Meanwhile, shares of FMIL closed at K12,000 after a spike in trading volumes of 5,525 shares for the day.

Source : Myanmar Times

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