YANGON (AFP) - The Myanmar military company behind a sprawling business empire has tried to reassure foreign investors after it won a legal tussle to buy out its Singaporean brewery partner Fraser & Neave.
In a rare public statement Myanma Economic Holdings Ltd (MEHL) - a huge but opaque mining-to-lager conglomerate - said it had won the right to buy F&N's 55 percent stake in their joint venture, Myanmar Brewery Limited (MBL).
MBL makes the country's best-selling Myanmar Beer.
The Myanmar firm - built by the country's generals during their decades of iron-fisted rule - insisted it had acted openly during the dispute with F&N.
It has previously rejected suggestions that the dispute is a test of the former pariah nation's investment laws as it opens up to international business under a quasi-civilian government.
"It is very important for Myanmar that foreign investors have confidence in the way we do business," MEHL deputy managing director Myint Aung said in the statement issued on Friday.
"The conduct of this arbitration shows our commitment to the rule of law and that we will always adhere to due process," he added, stressing that the legal process had been held in Singapore in agreement with F&N.
The row centred on MEHL's claim that F&N had breached a condition of their joint-venture deal when the ownership structure was changed after Thai billionaire Charoen Sirivadhanabhakdi took over the Singapore-based group last year.
F&N confirmed that the tribunal agreed to let the Myanmar army-backed group buy its stake, but said it had ordered a fresh valuation of the holding.
Huang Hong Peng, F&N's head of beer, said the US$246 million offered by MEHL was "grossly inadequate" and did not take into account the brewer's leadership position in Myanmar's drinks market, with profits surging at a "phenomenal rate" of nearly 50 per cent in the last year.
He said MBL was "one of the largest, most profitable and highest tax-paying companies in Myanmar".
"We are disappointed that this dispute has arisen, at a time when Myanmar is opening its market, and is on the cusp of the introduction of international beer competition," Huang said, adding that F&N would try to re-enter the Myanmar market.
State and military-run firms have for years had a virtual monopoly on beer production. But that is expected to change as the market opens up to foreign competition as part of economic reforms.
Investors are piling into the once-cloistered nation after international sanctions were lifted in response to reforms under a new regime that replaced outright military rule in 2011.
But a weak legal framework, despite a much awaited investment law, and poor infrastructure are seen as discouraging foreign business interest.