SGX-listed Memories Group, a Myanmar-based tourism-focused company, on Monday announced that it has acquired a 15.28 per cent stake in Strand Hotel International Limited for a consideration of $3.19 million, according to a company release.
SHIL has interests in three hotels – Strand Hotel, Inya Lake Hotel, and Hotel G Yangon – and The Strand Cruise in Yangon.
Memories Group entered into a share purchase agreement with Oakfame Investment Limited and its holding company, Sun Hung Kai & Co. Limited, to acquire 1,696,636 shares of Strand Hotel International Limited (SHIL).
The shares represent approximately 15.28 per cent of the total issued and paid up shares of SHIL which will be paid through the issuance of unlisted convertible bonds with a coupon rate of 5 per cent per annum.
Upon conversion, the maximum amount of consideration would be be $3.67 million, comprising $3.19 million principal amount, and accrued interest of $0.48 million. The convertible bonds’ maturity date is set at three years from the date of issue.
The conversion price of convertible bonds is at $0.185 (S$0.250), a 177.8 per cent premium over the weighted average price of the company’s shares of S$0.09, traded on 24 April.
SHIL is a joint venture partner of the Directorate of Hotels and Tourism Development in the Republic of the Union of Myanmar, and holds a 50% stake in Myanmar Hotel International Company Limited (MHIL) which has long-term leasehold rights and the rights to develop, operate, and manage three hotels in Yangon.
“The assets held by MHIL have long term value creation potential. The acquisition is in line with our plans to own, develop and/or operate more hotels and lodges so as to expand our hotel business segment,” said Cyrus Pun, CEO, Memories Group.
“I remain convinced of the enormous tourism potential of Myanmar and I am keen to drive the expansion of our hotel business footprint across the country in order to further cement our position as the leading tourism company in Myanmar,” said Pun.
Post acquisition, Memories Group will partly own the three leading hotels in Yangon, the Strand Hotel, the Inya Lake Hotel and Hotel G Yangon.
SHIL has also entered into another joint venture with GCP Hospitality Management Limited and holds an 80% stake in Myanmar Cruise International Limited, which owns a boat cruise in Myanmar.
The Strand Cruise service is a 61-metre-long ship that carries up to 50 passengers in 25 cabins along the Ayeyarwady River. A sister property of the Strand Yangon, The Strand Cruise is built in 2015 and said to be designed to navigate the shallow waters of Myanmar.
The Strand Hotel, located on the Strand Road in Yangon, was built in 1901 and is well-known for its British colonial architecture.
The Inya Lake Hotel on the Kabar Aye Pagoda road is built on a land parcel close to the Inya Lake. The 185 room-hotel was known as one of the three gifts presented by the secretary general of the Soviet in 1958 to the government of Myanmar.
Hotel G Yangon, located on the Alan Pya Pagoda Street, is part of the GCP Hospitality brand that has a portfolio of 19 hotels in Asia and the US.
Memories Group is a spin-off of Mainboard-listed Yoma Strategic Holdings’ tourism business and the first Myanmar tourism-focused company to be listed on an exchange.
Its businesses includes Balloons over Bagan, Bagan Land, a commercial and tourism related hospitality development, Asia Holidays Travel & Tours Co Ltd and Hpa-An Lodge, a resort in Karen state, among others.
Memories Group has a strategy to expand its portfolio through the acquisition of tourism related businesses. Recent acquisitions of the Group includes SM Asset Holdings Pte Ltd and Mokan (S) Pte Ltd for $40.7 million in 2018. Prior to that, the Group acquired Kayah Resort in Loikaw for $2.9 million in a cash-cum-stock deal.