SINGAPORE (THE BUSINESS TIMES) - Yoma Strategic on Wednesday (June 24) proposed to increase its existing shareholding and take a controlling interest in mobile payments firm Digital Money Myanmar (Wave Money) via a US$76.5 million (S$106.2 million) deal.
The Myanmar-focused, mainboard-listed company intends to first restructure the holding of its interest in Wave Money, by forming a new investment holding company in Singapore named Yoma MFS Holdings (YMFS).
YMFS will then fork out US$76.5 million in cash to acquire Norwegian telecommunications giant Telenor's 51 per cent stake in Wave Money, comprising 510,000 ordinary shares and 17.9 million redeemable preference share, under the proposed deal.
Yoma plans to invest up to US$25 million in YMFS, while the remaining consideration for the potential stake purchase will come from a Yoma-led consortium of investors that will become new shareholders of YMFS.
More information on these investors will be provided once the definitive agreements relating to the investments in the new holding company are executed, Yoma said.
It added that the proposed transaction will strengthen its interest in Myanmar's financial services sector and forge greater collaboration between Wave Money and the group's businesses.
YMFS will become the direct controlling shareholder of Wave Money with up to 63.76 per cent interest, including the 51 per cent stake from Telenor, upon completion of the proposed stake purchase.
Yoma's intended shareholding in YMFS will be up to 63.86 per cent, which means Yoma will have an effective interest in Wave Money of up to 40.72 per cent.
This will come after the completion of Yoma's proposed acquisition of the 10 per cent stake in Wave Money held by First Myanmar Investment, Ant Group's US$73.5 million investment, the proposed investments in YMFS and the potential stake purchase from Telenor.
In May, Yoma announced a proposed strategic partnership between Wave Money and Chinese e-commerce giant Alibaba's Ant Group to promote financial inclusion in Myanmar. Under this tie-up, Ant Group will become a substantial minority stakeholder in Wave Money by investing US$73.5 million through a new share issuance, although Yoma did not specify the size of this intended shareholding.
The proposed stake purchase from Telenor is subject to conditions precedent, including the closing of the Ant Group investment and regulatory approval.
As at Wednesday, the shareholders of Wave Money are the Telenor group (51 per cent), Yoma's wholly-owned subsidiary, Yoma Strategic Investments (34 per cent), First Myanmar Investment (10 per cent) and Yoma Bank (5 per cent).
Wave Money runs a network of more than 58,000 agents in urban and rural areas across 295 townships in Myanmar.
Telenor's head of financial services, Lars Erik Tellmann, said: "This is an opportune time for Telenor to divest. Both the Yoma group and Ant Group's core operation is financial services and technology and they are therefore the strongest owners to take Wave Money forward."
Wave Money will continue to be a strategic distribution channel for the Norwegian group's mobile operator, Telenor Myanmar, he added.
Shares of Yoma Strategic were trading flat at 27.5 cents as at 10.11am on Wednesday.