Singapore-listed Memories Group Limited, a tourism company based in Myanmar, has acquired a boutique property in Loikaw region, Kayah Resort, for about $2.9 million, in a cash-cum-stock deal, the company announced.
Memories will pay $1.45 million in cash, or 50 per cent of the deal amount, while the rest will be met through issuance of 7,781,280 new ordinary shares at an issue price of S$0.25 ($0.185).
For the deal, Memories Group entered into a sales and purchase agreement with Wa Minn Group of Companies Co Ltd and chairman Kun Naung Myint Wai.
Memories Group intends to upgrade and enhance Kayah Resort’s facilities and reposition it as an upscale resort under its four-star Keinnara brand
“We expect the rebranding to improve Kayah Resort including driving its occupancy rate,” said Serge Pun, executive chairman of Memories Group.
The purchase price of $2.9 million represents an 11x multiplier on the hotel’s average operating profit forecast from 2019 to 2021.
The issue price of S$0.25 per share represents a 28.2 percent premium over the weighted average price of the company’s shares of S$0.1950 for trades done on SGX.
The 26-key boutique hotel has a gross operating profit of approximately $220,000 for the nine-month period ended December 2017. Its occupancy rate is 30-60 per cent.
Room rates are expected to be revised to generate better yield for its investment.
Kun Naung Myint Wai, chairman of the Wa Minn Group, also leads other businesses including Wa Min Mining Co Ltd, Wa Mnn Properties Development Co Ltd and is also the president of the Shan United Football Club.
The tourism asset in Kayah state, eastern Myanmar, will be the second acquisition for Memories Group since its listing on the Singapore exchange in January. Kayah is home to many distinctive tribal cultures and offers tourists an off-the-beaten track experience.
Memories Group’s earlier acquired Burma Boating, a luxury yachting business of Yangon-based Tint Tint Travel and Tours Co Ltd and Freepier Limited, a Seychelles-registered company. Burma Boating offers luxury yachting services in the Mergui Archipelago in southern Myanmar.
Other businesses of Memories Group includes Balloons over Bagan, hot air balloon flight services in Bagan and Inle; The Bagan Land, a 4.3 acre land to be transformed into a commercial and hospitality development in Nyaung U, Bagan; Asia Holidays Travel and Tours; Hpa-an Lodge, a resort at the foothill of Mount Zaekabin, Karen State; and Pun Hlaing Lodge, an urban resort to be completed in 2019.
Memories Group’s tourism business interest spans across Myanmar’s most visited places – Loikaw, Hpa-An, Bagan, Inle Lake, the Mergui Archipelago and Yangon.
Memories Group is a spin-off entity of Yoma Holdings, First Myanmar Investment and Exemplary Ventures and had been undertaken as a reverse takeover of SHC Capital Asia in January 2018.