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Philippine giant Ayala takes 20% stake in Singapore's Yoma Strategic

The Straits Times

An artist's impression of Star City in Thanlyin, Myanmar, by Yoma Strategic Holdings. Yoma is a property developer with projects in Myanmar and China.PHOTO: YOMA STRATEGIC HOLDINGS

SINGAPORE - Myanmar-focused Yoma Strategic Holdings said on Thursday (Nov 14) that Philippine conglomerate Ayala Corporation has invested US$155 million (S$211 million) for a maximum 20 per cent stake in the company, making it the second-largest shareholder.

Yoma shares soared on Thursday morning on the news, despite the company sinking into the red for the second quarter, as separately announced on the same day.

At 9.04am, the shares were up 20 per cent or 6.5 cents to S$0.39, from a flat Tuesday close ofS$0.325. By 9.30am, they pared some of their gains to trade at $0.365, up four cents or 12.3 per cent.

The move is part of an overall US$237.5 million investment by Ayala into the Yoma Group - a 20 per stake each in Yoma Strategic and its affiliate First Myanmar Investment Public Co, a Yangon-listed company.

Yoma is a property developer with projects in Myanmar and China. It also runs KFC restaurants in Myanmar, plus has a cold chain logistics business and automotive and heavy vehicles arm.

Ayala, the Philippines' oldest family-owned conglomerate, has investments spanning banking and property to telecommunications and water. Its chairman and CEO, Mr Jaime Augusto Zobel de Ayala, said in October that the company was preparing to increase its overseas investments, particularly in South-east Asia.

Yoma said the collaboration is significant and expected to "substantially strengthen" the group's foundation for future growth. It will allow the group to accelerate the expansion of its core businesses, along with leveraging the experience and expertise of Ayala as a strategic partner.

Ayala will also nominate its president and chief operating officer Fernando Zobel de Ayala to the board of Yoma.

Ayala will pay an issue price of $0.45 per share for its Yoma stake, which represents a 37.7 per cent and 36.5 per cent premium over the volume-weighted average price of the shares traded on Nov 12 and Nov 13 respectively.

At least half or more of the placement proceeds will go into funding the growth and expansion of the group's various businesses, with the remainder being used to refinance existing indebtedness and for general corporate purposes.

Separately on Thursday, Yoma announced a net loss of US$44.2 million for its second quarter ended Sept 30, compared with a net profit of US$18.8 million a year ago.

This was mainly due to a previously disclosed a fair value loss recognition of about US$31.6 million in its plans to dispose of a China investment; and a drop in revenue for its real estate development segment, according to a regulatory filing on Thursday.

Loss per share (LPS) for the quarter was 2.33 US cents, from earnings per share (EPS) of 0.99 US cent a year ago.

Revenue, meanwhile, fell 24.6 per cent to US$22.3 million, from US$29.5 million a year ago. The group's real estate development segment - which accounts for 23.6 per cent of total revenue - fell 68.2 per cent to US$5.3 million, from US$16.6 million a year ago.

This was partially offset by its consumer segment, which saw revenue more than double to US$8.2 million, from US$3.34 million a year ago.

No dividend was declared for the quarter, unchanged from a year ago. Yoma said its board had reviewed the group's requirements for ongoing operations and plans for growth, including the project timeline for Yoma Central and The Peninsula Yangon.

For the half-year ended Sept 30, net loss stood at US$57.5 million, compared with a net profit of US$13.2 million a year ago. LPS was at 3.03 US cents, from an EPS of 0.7 cent the year prior. Meanwhile, revenue was down 19.2 per cent to US$40.8 million, from US$50.5 million the year prior.

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