SHC Capital Asia proposes to buy MM Myanmar for $51m — Deal Street Asia

SGX-listed SHC Capital Asia Ltd, an investment holding company backed by See Hoy Chan Sdn Berhad Group has said it plans to acquire MM Myanmar Pte Ltd, for about S$69.7 million ($51 million). It will finance the acquisition by issuing 264.997 million new consolidated shares at an issue price of S$ 26.3 Singapore cents per share, following a seven-to-one share consolidation. As part of the deal, which is actually a reverse takeover, SHC Capital will buy MM Myanmar shares from three entities – a wholly-owned unit of mainboard-listed Yoma Strategic Holdings which owns 63.1% of MM Myanmar, First Myanmar Investment Company Ltd (FMI), and Exemplary Ventures Ltd (EVL). Following the acquisition SHC Capital has proposed to change its name of MM Myanmar change its name to Memories Group Limited and undertake a compliance placement of up to 93 million new consolidated shares. Justifying the deal, SHC Capital said that Memories Group, a tourism-related company based in Myanmar, had a unique business model, and added that the latter had developed an Integrated Tourism Platform that connects its three business segments under one brand.

“Each of these segments comprises of different types of businesses and the platform allows for operational synergies, economies of scale, and opportunities for cross-selling of various tourism offering and services. The end result is a seamless and holistic tour experience for their customers in Myanmar,” SHC said.

The first of the three businesses is the experiences segment that operates hot air balloon flights in Bagan and Inle Lake regions. The Memories Group intends to develop the BL Business into a proposed commercial and tourism-related hospitality development located in Nyaung U Township, Bagan, Myanmar, it said. The second is the services segment, which is operated under Asia Holidays Travel & Tours Co. Ltd, and the latter specialises in designing and implementing customised tours, organisation of unique excursions, activities and cultural experiences, the management of travel logistics, as well as organisation of events. The third is the hotels segment – its assets here include a luxury 19-room boutique resort hotel located in the foothill of Mount Zwekabin in Hpa-An Township of Karen State, Myanmar, and Pun Hlaing Lodge, which when completed in FY2019, will be a 46- room unique ‘urban resort’ located within Pun Hlaing Estate in Hlaing Tharyar Township of Yangon. It must be noted that off MM Myanmar’s three businesses, one was were transferred to it from Yoma’s wholly-owned unit Yoma Strategic Investments Ltd (YSIL), while the other two businesses are now placed under it, were initially under EVL.

Founded in 2012, SHC Capital Asia’s relation with MM Myanmar Pte Ltd was first reported last year, when it entered a sales and purchase agreement with Yoma Strategic Investments Ltd and First Myanmar Investment for a $$70.7 million ($50 million) worth tourism business. The transaction resulted in Yoma Strategic possessing a 53.48 percent stake in SHC. A year before that, SHC Capital Asia purchased a Chinese medical equipment manufacturer, Tong Da Medical Device. The Group is led by Michel Novatin, CEO and Jean-Michel Romon, COO, who have extensive experiences in the hotel and tourism business operation across Asia, Europe and the Middle East, the company said. Novatin also heads as the CEO of SHC Capital Asia which will continue be a dedicated platform to focus on tourism-related works in Myanmar. The tourism sector in Myanmar has room to grow as the number of tourists arriving in Myanmar reached 4.7 million in 2015, with the industry’s contribution to the country’s GDP is $1.6 billion (2.6 percent of GDP) for the same year. The World Travel and Tourism Council estimates that the growth is expected to rise by 7.6 percent.

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