Wed 19 Feb 2014
Filed under: Business / Trade,News
Myanmar Thilawa SEZ Holdings Public Ltd announced it will issue shares for sale next month in order to raise about US $21 million to fund the first phase of the Burmese-Japanese Thilawa Special Economic Zone (SEZ) near Rangoon.
Set Aung, a government official who chairs the Thilawa SEZ Management Committee, and Win Aung, owner of Dagon Group and chairman of Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI), presented the plans during a press conference on Wednesday.
“Myanmar Thilawa SEZ Holdings Public Limited is going to sell 2.145 million shares in total during an initial sale next month with each share valued at 10,000 kyat [about $10] each,” Set Aung said, a plan that would amount to raising about $21 million in funds.
Thilawa SEZ is being planned by the Burmese and Japanese governments, together with a consortium of Japanese firms and UMFCCI. The sprawling industrial complex, located about 20 km south of Rangoon, will include a deep sea port, Japanese factories, and large housing projects.
The Burmese side owns 51 percent of the project and is responsible for developing a 2,400-hectare core zone. The Myanmar Thilawa SEZ Holdings Public Limited was formed by nine Burmese companies and owns 41 percent of the project, while the Burmese government owns the remaining 10 percent.
“All Burmese citizens and Burmese-owned companies can buy shares and we will make an announcement about share sales in early March and provide a one month period to buy shares,” said Win Aung. He added that investors could propose to buy shares at the company’s office and also at Ayeyarwady Bank Ltd, Myanmar Apex Bank Ltd, Co-Operative Bank Ltd, Yoma Bank Ltd and Kanbawza Bank Ltd.
Set Aung said funds raised by share sales would be used to finance construction of part of the first 400-hectare phase of the SEZ project, adding that this phase, called the Class A Area, would cost about $180 million to complete.
“There are several stages for development of the first phase. First stage is to level of the ground. And they level up the ground. And it’s more than 80 percent finished now,”he said, adding that Myanmar Thilawa SEZ Public Company had paid for this initial clearing work.
Set Aung said that if any of the shares would fail to sell, the nine firms owning the Myanmar Thilawa SEZ Public Company would buy up the shares.
The company is owned by Golden Land East Asia Development Ltd, Myanmar Sugar Development Company Ltd, Myanmar Edible Oil Industrial Public Corporation, First Myanmar Investment Company Ltd, Myanmar Agricultural & General Development Public Ltd, National Development Company Group Ltd, New City Development Public Company Ltd, Myanmar Technologies and Investment Corporation Ltd, and Myanmar Agribusiness Public Corporation Ltd.
It remained unclear how much money the owners of Myanmar Thilawa SEZ Public Company would invest in the development of Thilawa, or how much had been spent on the initial ground work.
The Thilawa project is the most advanced of several huge, foreign investment-driven SEZ projects around the country, which are part of Naypyidaw’s strategy for attracting investment in Burma and increase industrial productivity in the impoverished nation.
The Thilawa SEZ is envisioned as a driver of Rangoon’s future economic growth and could potentially provide tens of thousands of jobs. The project has, however, run into disputes over land ownership, with about 80 farmers claiming that they were forcibly evicted of their land and received unfair compensation.