• RTO into SHC on the Catalist Board
• Myanmar tourism focused spinoff
• To be led by new CEO, Michel Novatin Plans to spin off tourism business through

RTO

The group announced that it plans to spin off its tourism-related businesses as part of a ReverseTake-Over of SHC Capital Asia Limited (SHC) which is listed on the Catalist Board of the SGX. A conditional sale and purchase agreement has been signed for the proposed sale of its tourismrelated businesses, comprising the “Balloons over Bagan” business (a hot-air balloon business operating in the Bagan area in Myanmar), Pun Hlaing Lodge (a 46-key resort currently under construction on 2.192 acres of land on Pun Hlaing Estate) and Bagan Land (a 4.3-acre parcel of land in Nyaung U, Myanmar, that will be developed into a proposed commercial and tourism-related hospitality development).

We understand that the new target company also plans to issue new shares to acquire two new businesses, which are Hpa-An Lodge (a 19-key lodge business in Hpa An Township, Myanmar) and Asia Holidays (a tourism and destination management company).

Yoma to hold 53.5% in SHC before any proposed compliance placement

After the exercise, Yoma is expected to be issued 167m shares valued at an aggregate of S$43.9m which gives the group a shareholding of 53.5% in SHC before taking in account any shareholding effects arising from any proposed compliance placement of SHC. The group envisions that SHC will be transformed into a Myanmar-focused tourism company to acquire, develop and operate new tourism assets in the emerging economy. In addition, the group will be led by Mr Michel Novatin who is an industry veteran in managing luxury hotels.

We believe this development is a sensible one as the proposed divestment of assets into SHC are conducted at reasonable valuations and that the spin-off, to be led by a new CEO, could likely gain a sharper focus in growing its operations in the burgeoning tourism sector in Myanmar. We highlight that the proposed exercise is subject to condition precedents and further approvals from relevant authorities. Maintain HOLD with an unchanged fair value estimate of S$0.54.

Source: OCBC Research - 26 Oct 2016