- Ayala will be investing up to US$237.5 million for a 20% stake in each of Yoma Strategic and FMI.
- This landmark partnership is one of the largest FDI in Myanmar and the largest ever investment into the country by the Philippines private sector.
- Ayala’s participation in the boards of Yoma Strategic and FMI would add expertise to grow the Yoma Group’s core businesses.
- The significant premium paid for Yoma Strategic and FMI shares demonstrates Ayala’s confidence in the respective businesses.
Yoma Strategic and its affiliated company, Yangon-listed FMI, today announced that one of the Philippines’ leading conglomerates, Ayala Corporation, would be investing US$237.5 million for a 20% stake in each of the Yoma Group companies, the largest FDI made by the Philippines private sector into Myanmar. This underscores the confidence that Ayala has placed in the future of Myanmar and of the Yoma Group.
Ayala’s investment of US$237.5 million for a maximum 20% stake in the Yoma Group will make them the second-largest shareholder in both companies. Ayala will nominate Mr. Fernando Zobel de Ayala to the board of each of Yoma Strategic and FMI.
“Today marks a new milestone for the Yoma Group. I am extremely pleased and honoured to have Ayala become one of our most important strategic partners. This partnership reflects Ayala’s faith in the future of Myanmar and validates the Yoma Group’s business model in the country. Ayala is recognised as one of the foremost conglomerates in the Philippines with a history of 185 years and a stellar track record of commercial success in many sectors across the economy. We look forward to leveraging on the expertise and experience of Ayala to strengthen our existing businesses as well as to explore potential opportunities in Myanmar,” said Serge Pun, Executive Chairman of Yoma Strategic and FMI.
As one of the most well-respected conglomerates in Asia, Ayala’s development in the Philippines in recent years has been particularly impressive and is relevant for the Yoma Group’s growth near-to medium-term growth plans in Myanmar. Ayala’s diversified businesses cover many sectors that are highly relevant for the Yoma Group. Furthermore, they share a long-term view of building scalable and sustainable platforms to cater to the population of Myanmar.
“Our partnership with the Yoma Group gives Ayala a unique opportunity to participate in Myanmar’s growth story. We could not imagine a better way to do this than with the Pun family, whose solid, decades-long reputation as a business house has cemented their expertise in multiple sectors,” said Jaime Augusto Zobel de Ayala, Chairman & CEO of Ayala.
Yoma Strategic will issue up to 474.68 million primary shares to Ayala for a total consideration of up to US$155 million; this represents 20% of the enlarged issued and paid-up share capital of Yoma Strategic immediately following the issuance of these new shares. The transaction will be divided into two tranches: an initial 332.50 million shares representing 14.9% of the enlarged issued and paid-up share capital will be issued by end of November 2019 using the general share issuance mandate. Yoma Strategic will also seek shareholders’ approval for the remaining 142.18 million shares, representing 5.1% of the enlarged issued and paid-up share capital, at a shareholders’ meeting. The Issue Price of S$0.45 per share represents a 37.7% premium over the volume weighted average price of the shares traded on 12 November 2019.
“The partnership with Ayala is hugely significant as the Yoma Group plans for the future. Ayala’s leadership position and well-run operations in each of their key business lines across real estate, financial services, fintech, energy and others provide a roadmap for how the Yoma Group can develop. The new investment by Ayala and the recent disposals of our non-core investments will serve to provide the capital to propel us towards our aspirations, whilst strengthening the Group’s balance sheet,” said Melvyn Pun, CEO of Yoma Strategic.
“We are confident that by leveraging our own capabilities and experiences over the last 185 years, Ayala’s partnership with the Yoma Group could certainly help improve the lives of the people in Myanmar through purposeful business,” said Ayala President & COO Fernando Zobel de Ayala.
Ayala will also provide a US$82.5 million convertible loan to FMI which would allow them to convert to up to 20% equity shareholding in FMI upon the regulatory process being completed. On 12 July 2019, the Securities and Exchange Commission of Myanmar issued Notification 1/2019 which announced that foreign individuals and foreign entities will be permitted to invest in up to 35% of the shares in Myanmar companies listed on the Yangon Stock Exchange (“YSX”).
“This is the first major foreign investment into a YSX-listed company. FMI and Ayala are looking towards converting this convertible loan into equity within the shortest practical time period. The conversion will result in allotting 20% of the enlarged FMI shares to Ayala at a price of MMK15,000 per share. The transaction will set the benchmark for Myanmar companies with regards to new avenues to raise and receive foreign capital following the regulatory liberalisation set by the new Myanmar Companies Law 2017. It is indeed a milestone for both FMI and the development of the Myanmar capital markets in the ability to bring in foreign capital to Myanmar companies,” said Tun Tun, COO of FMI.
Mr. Serge Pun concluded: “The decision of Ayala Corporation to invest in the Yoma Group has clearly opened up vast opportunities for our two companies for which I feel extremely proud and honoured. But even more so, I am proud and excited for Myanmar and the many possibilities of empowerment and tangible benefits that this will bring to our country and its people.”
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Image from Financial Times