Myanmar based SIM Co Ltd, which recently got an approval from the Myanmar Investment Commission (MIC) to operate an offshore supply base is looking to raise up to $60 million for this investment – through a mix of equity sale and debt funding.
“Our estimate for the capital expenditure is around $60 million for the base to be operational,” said Tin Min Htut, executive director of Trust Venture Partners, the firm providing financial advisory services to SIM.
The offshore supply base project is to be located in Nga Yoke Kaung town, Ngaputaw township in the Ayeyarwaddy region. This will be the second such project in the country. The first offshore supply base is located in Thaketa, which is not considered a full-fledged platform due to the water depth and a need for upgrades.
During an interaction with DEALSTREETASIA, Htut said that the company is seeking to raise $20 million through debt and $40 million through equity investments.
The first phase of the development will use 49 acre out of the 184 acres that the company has for the project.
The remaining 135 acres will be further developed through a JV, for which they are currently seeking a joint venture partnerships, said Htut.
SIM is open to both foreign and local partner for “the operation and long term strategic partnership” in the project.
The company is led by two founders, Nay Lynn Oo and Aung Min Han. Han is also the CEO of Yangon based Ever Flow River Group (EFR), an integrated logistics service provider operating in Myanmar for over 20 years.
EFR has diversified into other industries such as trading, plantation, manufacturing, hospitality and tourism.
SIM has been exploring a number of sources including banks, foreign operators as well as strategic investors for the offshore project investment. “We are approaching some of the private equity firms as well. One of the private equity firms has expressed interest and we have initiated talks,” revealed Htut.
Offshore exploration and production majors in the area include Total and PTTEP , which are located at the gulf of Mottama and are supplying to the country through the Thaketa offshore supply base and those from Thailand or Singapore.
With the availability of the offshore supply base in Nga Yoke Kaung, which is well within 200 miles range from the oil and gas sites located around Bay of Bengal and Mottama gulf, the time taken to ship the supplies can be reduced to one day compared to the time take of up to four days it could take to come from Thailand or Singapore.
In the same meeting of MIC, Myint & Associates Offshore Supply Base Limited, a subsidiary of local company, Myint & Associates Co Ltd, a member of MPRL E&P Group of Companies was also granted permission for a K45,955 million ($33.7 million) investment for a 29.95 acres of land in Nga Yoke Kaung town.
MPRL E&P has conducted exploration work in offshore block A-6. Their first gas discovery was in 2012 and together with its partners, Woodside and Total, in the same block, made a second gas discovery in January 2016.