• 30-year concession to operate airport
• Acquiring automotive stakes from FMI
• Increasing interest in cold chain JV

Partnership finalizing 30-year concession to operate airport

Yoma announced that it will take a 9.0% stake in a special purpose company, MCJalux Airport Services Co., Ltd. (MJAS), alongside JALUX Inc. (45.5%) and Mitsubishi Corporation (45.5%). MJAS has signed a 30-year concession agreement with Myanmar’s department of Civil Aviation (DCA) for the operation, rehabilitation and maintenance of airport facilities, including terminal buildings and runway (excluding air traffic control), at Mandalay International Airport. Operations are scheduled to commence around Mar-2015. Both JALUX and Mitsubishi will contribute to the partnership with their significant experience in airport operations and infrastructure development while Yoma, being a leading Myanmar corporation, will provide the project with real estate development and local expertise.

To acquire stakes in automotive businesses from FMI

In addition, Yoma also completed a rationalization of its Myanmar automotive businesses with First Myanmar Investment Company Limited (FMI) and will acquire FMI’s 30% and 20% stakes in Myanmar Motors and Summit SPA Motors Limited, respectively. Myanmar Motors is an investment holding company involved in operating Volkswagen’s service centre, vehicle leasing and distribution of automotive tires and parts in Myanmar. Summit SPA Motors is a JV established with Sumitomo Corporation in 2014 to distribute Hino trucks and buses and operate authorized service stations in Myanmar. The aggregate value of these transactions is S$2.7m, and Yoma will own 100% and 40% in Myanmar Motors and Summit SPA Motors Limited post-transaction.

Increasing JV interest in cold chain related business

Finally, the group also announced that it has acquired an additional 20% stake in KOSPA Ltd, a JV established to distribute food produce in Myanmar using vehicles with refrigeration capacity to improve the quality of products being transported to markets. There are no material terms to the acquisition as KOSPA is a new set-up; post-transaction, KOSPA will be a 50% JV of Yoma. Pending more color regarding the financial impact of these businesses, in particular the airport concession, we opt to keep our fair value estimate of S$0.74 unchanged. Maintain BUY.

Source: OCBC Research - 25 Nov 2014