SINGAPORE Singapore property and drinks conglomerate Fraser and Neave Ltd (FRNM.SI) said on Thursday its joint venture partner, which is run by the Myanmar military, plans to start arbitration proceedings over the company's stake in Myanmar Brewery Ltd.
The brewery represents only a small part of F&N's business but losing its stake would mean being shut out of one of Asia's fastest growing beer markets. In a May earnings briefing, F&N said its Myanmar beer business had recorded double digit growth from a year earlier.
F&N, which is controlled by Thai billionaire Charoen Sirivadhanabhakdi, currently holds 55 percent of Myanmar Brewery while Myanmar Economic Holdings Ltd (MEHL) holds the remaining 45 percent.
In a statement, F&N said the Myanmar company was trying to obtain its share in the brewery by citing a joint venture agreement. MEHL officials could not be reached for comment.
"The company maintains that there is no basis for MEHL to give that notice. The company has engaged lawyers and intends to vigorously resist the claim," the F&N statement said.
Myanmar Brewery, which manufactures beer brands such as Myanmar Beer, Myanmar Double Strong and Andaman Gold, is estimated to have an 83 percent share of Myanmar's growing beer market by volume, F&N said in a recent presentation.
"Myanmar Brewery is important to F&N because of the emerging market exposure, the growth story for Myanmar is pretty strong and they are the dominant brewer," said Jit Soon Lim, head of Southeast Asia equity research at Nomura.
F&N said on Tuesday it would list shares in its property arm, Frasers Centrepoint Ltd, on the Singapore Exchange this year. F&N will keep the food and beverage as well as the publishing and printing businesses.
(This story corrects time frame for briefing in second paragraph to May)
(Reporting by Eveline Danubrata; Editing by Miral Fahmy)