26th Aug 2014 09:44
LONDON (Alliance News) - Myanmar Investments International Ltd Tuesday said its subsidiary, Myanmar Investments Ltd, has signed a conditional joint venture agreement with Myanmar Finance Co Ltd, a provider of microfinance loans principally to small-scale business operators in rural and urban areas of Yangon and neighbouring Bago in Myanmar.
In a statement, Myanmar Investments International said the new joint venture, Myanmar Finance International Ltd, will have both a lending and deposit-taking licence, issued by the Myanmar government.
Under the terms of the agreement, Myanmar Finance Company Ltd will inject its existing microfinance business into Myanmar Finance International Ltd, which will be jointly managed by the two partners.
Myanmar Investments and Myanmar Finance Company have agreed to an initial phased contribution of USD4.8 million in capital, with Myanmar Investments' total contribution being USD2.75 million. Myanmar Investments will own 55% of the new company and Myanmar Finance Co the remaining 45%.
The partners will initially contribute USD2 million for shares in Myanmar Finance International, of which Myanmar Investments' contribution is USD1.1 million in cash and Myanmar Finance Co's contribution is USD900,000.
Myanmar Finance Co's initial contribution will be principally in the form of a transfer of the existing business with a top-up payment in cash when the valuation of the existing business is finalised, according to the statement.
The balance of the capital commitments will be in cash and will be called in two further tranches as the business expands. The joint venture agreement is conditional on Myanmar Finance International receiving its own microfinance licence. According to the statement, this is expected to be issued shortly by the Myanmar Microfinance Supervisory Enterprise, part of the Myanmar Ministry of Finance.
By Samuel Agini; [email protected]; @samuelagini
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