Myanmar-focused developer launches share sale on day of Obama visit

HONG KONG Mon Nov 19, 2012 5:39am EST

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HONG KONG Nov 19 (Reuters) - A Myanmar-focused property developer launched a share sale on Monday to fund the building of a luxury real estate project in the frontier market, coinciding with the historic visit by U.S. President Barack Obama.

Singapore-listed Yoma Strategic Holdings Ltd is raising about $83 million in the share sale, and the offering also got attention from international investors thanks to Obama's visit, a person with knowledge of the matter told Reuters.

Myanmar, also known as Burma, has introduced the most sweeping reforms in the former British colony since a 1962 military coup. Some global companies are keen to tap business opportunities in the country that has recently embraced democracy.

Yoma, which gets about 90 percent of its revenue from real estate, is offering up to 192.9 million new shares in a range of S$0.515 to S$0.53 each, seeking to raise as much as S$102.2 million ($83.2 million), said the source who was not authorized to speak publicly on the matter.

The new shares are being offered at a discount of as much as 8 percent to Friday's close. One U.S. investor agreed to buy nearly half of the shares on offer, the source said.

HOT SECTOR

Obama became the first serving U.S. president to visit Myanmar on Monday, praising the country for democratic and economic reforms in the past year.

"This is timely, given Obama's visit to Myanmar, increased international investment in the country and real estate becoming more of a hot sector," the source added.

Foreign interest in Myanmar has soared since the end of military rule in 2011, with a period of rapid economic and political reform under President Thein Sein. The increased interest has pushed residential real estate prices up 39 percent in the first nine months of the year, while office rental rates are up 50 percent, according to figures from investment bank Silk Road Finance.

Yoma has agreed to buy an 80 percent stake in Meeyahta International Hotel Ltd. (MIHL) for about $81.3 million. MIHL is planning to develop a five-star and a four-star hotel, a high-end serviced apartment complex and business towers in commercial capital Yangon, in a project that is expected to cost up to $350 million, Yoma said in a statement to the Singapore stock exchange.

DBS and UBS were hired as joint bookrunners on the share sale.

The company also owns the rights to agriculture land in the country, currently producing jatropha used in biodiesel and black pepper, as well as a partnership to distribute in Myanmar imported light trucks made by Dongfeng Automobile Co. Ltd (DFAC) . ($1 = 1.2291 Singapore dollars) (Reporting by Elzio Barreto; Editing by Denny Thomas and Muralikumar Anantharaman)

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