Memories Group acquires a portfolio of assets including an island in Myanmar’s Mergui Archipelago

 

  • Acquiring development rights over 5,100-acres islands, a 24-villa five-star hotel and a 72- room three-star hotel
  • The combined purchase price of US$40.7 million will be funded by cash and issuance of new shares
  • The new shares will be issued at a significant premium of 16.9% over the last traded weighted average price
  • Memories Group’s Integrated Tourism Platform now covers seven of Myanmar’s major tourist destinations

 

Singapore, 25 July 2018 – SGX-Catalist listed Memories Group Limited (“Memories Group” or the “Company”) and together with its subsidiaries (the “Group”), a Myanmar-based tourism-focused company will be acquiring the development rights of Bo Ywe Island, Nga Mann Island and Kyun Pila Island (collectively, the “Islands”), together with Awei Pila which is a five-star hotel located on the Kyun Pila Island. In addition, the Group will also be acquiring Hotel Suggati, a three-star hotel in Mawlamyaing. The total purchase price for all these assets is US$40.7 million.

 

The Kyun Pila, Bo Ywe and Nga Mann Islands are some of the most pristine islands in the Mergui Archipelago and are approximately 90km or a 2-hour speedboat ride from Kawthaung, Myanmar’s southernmost city. The development rights to the Islands has a 50-year lease term from 2013 and is renewable for an additional two terms of 10 years each.

 

The Islands have 10 major and 40 minor beaches, providing the Group with an opportunity to develop resorts and host a number of tourism activities. The Islands’ usable land area is approximately 100- acres with a further 550-acres reserved for future development. Additionally, the development rights allow the Group to supervise over 4,450-acres of environmental protected land, which may be utilised to create trails for eco-friendly activities such as trekking, bird watching and nature study tours with biologists.

Awei Pila will be the first five-star beachfront resort on Kyun Pila Island and is scheduled to open by the end of December 2018. The luxurious resort will have 24 eco-designed villas with spacious rooms offering unobstructed views of a white sandy beach and clear blue waters. In addition to its modern facilities, the resort will also offer daily outdoor recreational activities for staying guests such as forest hiking, diving and other eco-friendly activities.

Hotel Suggati will be a 72-room three-star business and leisure hotel located along the river bank of Salween River in Mawlamyaing, Mon State, and is scheduled to open by the end of December 2018. The hotel is a 10-minute drive from the city’s centre and has a good range of facilities including a spa, restaurant, gym, boardroom, and ballroom which can host up to 90 people. Mawlamyaing, formerly known as Moulmein, is the fourth largest city in Myanmar with one of the largest sea and trading ports in the region. Mawlamyaing is also home to the world’s largest reclining Buddha, which is a major tourist attraction.

Mr. Serge Pun, Executive Chairman of Memories Group commented, “We have been working on these acquisitions for a while now and are happy that they have come to fruition. The unique positioning of the Islands, together with the two well-located properties will broaden our hotel offering and further enhance our integrated tourism platform. We want to allow people to explore Myanmar, to have them embrace the culture of this country, and experience the beauty of its untouched, natural environments.”

The sellers are a group of 17 third party stakeholders with Samena Mandalay Holdings being the largest stakeholder. Samena Mandalay Holdings is an investment vehicle of Samena Special Situations Fund III L.P., a private equity fund managed by Samena Capital.

The aggregate acquisition consideration for the two hotels and the development rights of the Islands is US$40.7 million, which is based on independent valuations performed by Jones Lang LaSalle. The acquisition will be funded by cash and the issuance of new shares.

A total of 146,473,133 ordinary shares of the Company (“Shares”) at an issue price of S$0.25 per Share (the “Consideration Shares”), which represents US$26.9 million or 66.2% of the purchase price, will be allotted and issued at completion of the acquisition. The issue price of S$0.25 per Consideration Share represents a 16.9% premium over the weighted average price of the Company’s Shares of S$0.2138 for trades done on the SGX-ST on 20 July 2018, being the full market day on which the Company’s shares were traded prior to the date of the sales and purchase agreement on 25 July 2018.

The remaining 33.8% of the purchase price will be funded by a cash consideration of US$13.8 million which is payable only upon the satisfaction of certain conditions subsequent. The cash consideration will be funded by way of a combination of debt/equity fund raising in the capital markets and/or external borrowings.

Samena Mandalay Holdings will hold approximately 28.11% of the enlarged share capital of Memories Group following the completion of the acquisition.

The Company intends to rely on the general share issue mandate to be obtained at the forthcoming annual general meeting (“AGM”) to be held on 25 July 2018 for the issuance of the Consideration Shares It will also be making an application to the SGX-ST through its Sponsor for the listing of and quotation for the Consideration Shares on the Catalist. The Company will make the relevant announcements on completion and upon receipt of the listing and quotation notice from SGX-ST.

Commenting on the acquisition, Mr. Serge Pun added, “This is the second acquisition where the vendor has accepted Memories Group’s shares at a premium which is an indication to the positive outlook they have on Myanmar’s tourism market and the Company’s growth. We are very glad to welcome Samena Capital as our new shareholder.”

Commenting on transaction, Shirish Saraf, Founder & Vice Chairman of Samena Capital, said, “We are excited about the opportunities for international tourism in Myanmar. We are glad to combine our Myanmar tourism investments with Memories Group and become a shareholder of the enlarged Group. We look forward to collaborating with Memories Group in building a unique tourism platform.”

Source: Memories Group Press Release

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