Yoma to finance MSP’s $7m heavy equipment rental

Singapore-listed Yoma Strategic announced a partnership with US Caterpillar’s Myanmar dealer to enter the heavy equipment rental sector in a bid to leverage on the upturn in the resource and construction industry.

On September 24, Yoma Fleet, the automotive and heavy equipment financing subsidiary of Yoma Strategic, signed a partnership agreement with Thaketa-based Myan Shwe Pyi Tractors Limited (MSP),a supplier of power systems, machines and services to the agriculture, construction, forestry and mining industries. MSP is also the authorised independent dealer of Caterpillar-branded equipment in the country.

A number of large-scale infrastructure projects are currently in the pipeline in Myanmar, where infrastructure development is critical for the country’s economy.

“These projects include power stations, ports, special industrial zones, and upgrades to existing transportation networks. Under its National Transport Master Plan, the Myanmar government is planning to allocate US$21.4 billion to rail, road, port and aviation projects by 2030,” the press statement said.

In addition, the two companies are optimistic on the growth in resource industry, as the sector has undertaken various reforms aimed at attracting inward investments.

Yoma Fleet will initially finance MSP’s existing rental portfolio for around US$7 million, which includes 71 pieces of heavy equipment of which 63 are Caterpillar machines. In addition, Yoma Fleet will become the preferred financing partner for MSP customers.

In the announcement, Yoma said the partnership will support its retail and rental business as well as provide funding for its customers.

“At a time when we are anticipating a huge pick-up in infrastructure build-out as well as a resurgent mining sector, we expect this partnership to provide scalable financial returns for our Yoma Financial Services division in the years to come,” Melvyn Pun, Yoma’s CEO, commented, adding that the deal makes the company “a first mover” in the financing of construction equipment and heavy machinery in Myanmar.

“In both the infrastructure and construction sectors, the lack of financing for mechanisation has historically been a major bottleneck to growth,” he went on. U Khin Maung Win, chair of MSP, stressed that the timing of the partnership was ripe as the country “is poised for substantial growth in rental demand in the coming years.”

Yoma Strategic has a diversified portfolio of businesses in food and beverage, real estate, consumer and banking, and financial services.

Property push

Earlier this month, Yoma Strategic’s property arm, Yoma Land,also held an event to promote and sell units at three of its projects: StarCity, Galaxy Towers and Lotus Hill in Pun Hlaing Estate.

The projects were branded as special lifestyle residential homes equipped with spacious landed compounds, full services and facilities to attract the interest of local and foreign buyers. At Star City, Zone A and Zone B have been fully sold and among the 400 units left in Zone C, around 100 have been sold, said Ma Theint Su Mon, a sales manager at StarCity.

Yoma Land was first launched in June as the real estate arm of Yoma Strategic Holdings, which is listed in Singapore. The new division houses Pun Hlaing Estate, StarCity, Yoma Central and The Peninsula Residences Yangon, which is being developed on a 10-acre site in downtown Yangon at the junction of Sule Pagoda Road and Bogyoke Aung San Road.

The Peninsula Residences is part of the US$700 million Yoma Central mixed development project, which broke ground in February last year.

Yoma Land is also planning to expand into the mass market with low-cost housing projects starting this year.

Shares of Yoma Strategic closed Monday at 26 Singapore cents apiece, which is less than half its value of 57 cents exactly a year ago. At those levels, the firm has a market capitalisation of S$502.4 million and yield of less than 1pc.

Source: Myanmar Times

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