Singapore High Court has dismissed with costs an interim injunction sought by Myanma Economic Holdings (MEHL) in its ongoing tussle with Fraser & Neave (F&N) for stakes in Myanmar Breweries (MBL).
The two MBL stakeholders have been tussling since 2013 over the fair value of F&N's 55 per cent stake in Myanmar's largest beer-maker by volume.
F&N's position is that the sale should be completed in US dollars based on a 2013 exchange rate as applied by an independent valuer. The valuer has estimated the fair value of F&N's stake to be US$560 million (approximately S$770 million), after converting 500 billion kyat at the 2013 exchange rate. MEHL, which holds a 45-per-cent stake in MBL, wants to apply the current exchange rates as stated by Bloomberg on the day before the sale is closed. At current exchange rates, 500 billion kyat would be equal to US$407 million (about S$560 million). (See correction note below)
It filed the injunction in the Singapore High Court last Wednesday to order F&N to transfer its stake to them by Aug 20 for that amount. MEHL's desired exchange rate would yield about US$394 million, well under what F&N is demanding.
F&N said yesterday the case was dismissed last Friday with costs.
"The company will make further announcements in due course to update shareholders of any material developments," the firm said in a release posted on the Singapore Exchange.
The two firms have been at loggerheads since F&N was taken over by parties linked to Thai tycoon Charoen Sirivadhanabhakdi.
MEHL said the takeover breached the joint venture agreement, which, in turn, entitled it to buy its partner's stake.
It initiated legal proceedings and won, but that triggered the dispute over the exchange rate.
Correction: An earlier version of this story stated:"F&N has insisted that any sale of its stake should be completed in United States dollars based on a 2013 exchange rate, estimating the fair value of its stake to be US$560 million (S$768 million). MEHL, which holds a 45 per cent stake in MBL, wants F&N to sell its stake for 500 billion kyat (S$540 million), a price that was set by an independent valuer." F&N has since clarified that the fair value estimate of its stake in MBL came from an independent valuer. MEHL, according to court documents, wants to apply the current exchange rates as stated by Bloomberg on the day before the sale is closed.