16th Nov 2015 11:59
LONDON (Alliance News) - Myanmar Investments International Ltd on Monday said that the Norwegian Investment Fund for Developing Countries has entered conditional agreements to become a 25% equity shareholder in the company's microfinance joint venture, Myanmar Finance International Ltd.
The managing director of the Norwegian Investment Fund for Developing Countries, which was established by the Norwegian Parliament in 1997, said he has been impressed by the venture's progress.
"Microfinance is a cornerstone of Norfund's investments in financial institutions in developing countries. Provision of financial services to low-income individuals and micro, small and medium sized enterprises that otherwise would have little or no means of access to capital is essential for enabling economic growth and poverty reduction in Myanmar," Kjell Roland, Norfund's managing director, said in a statement.
A subsidiary of Myanmar Investments International in August 2014 signed the joint venture deal for the development of a microfinance business in Myanmar with Myanmar Finance Company Ltd. The following January, the subsidiary and Myanmar Finance Co entered into an option agreement with Norfund whereby Norfund was granted the option to subscribe for up to 25% of the microfinance venture.
Norfund will pay USD1.4 million for the new shares, according to Myanmar Investments International.
Concurrently, the fourth and final tranche of the initial capital specified under the joint venture agreement is being called from Myanmar Investments and Myanmar Finance Co, with Myanmar Investments to contribute USD140,833 in the capital call.
Myanmar Investments and Myanmar Finance Co will be equal shareholders in the venture following the Norwegian Investment Fund For Developing Countries' investment. The original venture partners will each own 37.5% of the company.
Once the subscription completes, Myanmar Finance International intends to secure long-term debt facilities "to leverage its business".
"Norfund's participation as a shareholder and its connections with well-established microfinance lenders will greatly assist in this. If required, MIL will consider making additional equity contributions to MFIL in future," Myanmar Investments International said.
Shares in Myanmar Investments International untraded at USD1.375 on Monday late morning.
By Samuel Agini; [email protected]; @samuelagini
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