Myanmar Thilawa SEZ Holdings (MTSH) Public Ltd announced that the company will return over K18 billion ($18.7 million) worth of oversubscribed shares to the public.
Shares of Thilawa Special Economic Zone (SEZ) went on sale in March – offered through banks in absence of a stock exchange – in a bid to raise K21.45 billion ($22.3 million) through selling 2.145 million shares (K10,000 each) to fund the first phase of construction of the SEZ 25 kilometres south of the country’s commercial hub Yangon.
However, the proposed subscription has reached over K40 billion ($41.6 million), a top official of the company said.
A total of over 17,000 proposals to buy more than 4 million shares were received and among them, about 90 percent wanted to subscribe 500 shares or less and the rest proposed to subscribe over 500 shares.
Currently, MTSH is negotiating with the banks to return the oversubscribed shares to the public and MTSH will pay for the banks’ service cost, said U Tun Tun, treasurer of MTSH.
The shares were available at Kanbawza Bank, Ayeyawady Bank, Myanmar Apex Bank, Cooperative Bank and Yoma Bank.
While selling shares MTSH gave priority to the buyers who were subscribing to 500 shares (valued K5 million) or less. The company intends to allocate 56 percent of the shares to buyers who belong to this category and 44 percent to those subscribing over 500 shares, chairman of MTSH U Win Aung said.
“The government gave us instructions to make shareholders with less subscription to become majority in the public company,” said U Set Aung, chairman of the SEZ management department and also the vice chairman of the Central Bank of Myanmar.
The subscribers of over 500 shares may not be able to buy shares according to their proposals and can only subscribe to the number of shares set by MTSH, U Win Aung said.
“We sold shares to the public to make us a proper public company. These shares are only a part of the overall project. We will sell more shares depending on our requirement.
“Not only Myanmar and Japan but also other international companies are offering to invest in the project,” he said.
However, MTSH didn’t explain its investment plans and profit sharing procedures prior to the share sales and share buyers said they would like to know details of the company’s plans if they are buying its shares.
An applicant from Yangon’s Sanchaung township who submitted share subscription proposal told Myanmar Business Today that he wants to buy the shares of MTSH because Thilawa is Myanmar’s very first Special Economic Zone, but he doesn’t know the detail of the company’s investment and profit sharing plans.
“The company should hold meeting with the shareholders to explain their plans in detail,” he said requesting anonymity.
The Thilawa project is a joint venture undertaken by the Myanmar and Japanese governments along with a consortium of Japanese companies, where the Myanmar side owns 51 percent and the Japanese side the rest.
In the joint venture company, Myanmar Japan Thilawa Development Ltd (MJTD), Myanmar government’s Thilawa Special Economic Zone Management Committee owns 10 percent and the rest is owned by MTSH, which is a consortium of nine Myanmar companies.
The Myanmar companies are: FMI Co Ltd, Golden Land East Asia Development Ltd, Myanmar Agribusiness Public Corp Ltd, Myanmar Agricultural & General Development Ltd, Myanmar Edible Oil Industrial Public Corp Ltd, Myanmar Sugar Development Plc, Myanmar Technologies and Investment Corp Development Ltd, National Development Co Group Ltd and New City Development Plc.
On the Japanese side, 39 percent is owned by MMS Development Co Ltd, led by three Japanese firms Sumitomo Corp, Mitsubishi Corp and Marubeni Corp, and 10 percent is owned by the Japan International Cooperation Agency (JICA).
Thilawa SEZ, which is expected to be operational by 2015, includes a large industrial zone, a deep sea port, factories and housing projects.