Yoma Strategic Holdings to acquire 80% interest in PHGE land for $2.4m

46-room hotel soon to rise there.

The Board of Directors of Yoma Strategic Holdings Ltd. announced that it has entered into a conditional agreement with Pun Hlaing Lodge Ltd. (PHL) to acquire 80% effective interests in a plot of land located in the Pun Hlaing Golf Estate (PHGE).

The land is located in the Pun Hlaing Golf Estate. It is designated for the construction of a hotel and the land area is 8,887 square metres. PHL holds rights over a 60 year old lease of the PHL Land which was issued by the relevant authority on 24 December 1998. PHL is a wholly-owned subsidiary of Serge Pun & Associates (Myanmar) Limited.

An international standard hotel building that will comprise 46 guest rooms and related conference and banquet facilities is proposed to be constructed on the PHL Land.

The valuation of PHL Land arrived at by the independent valuer appointed by the Company, Jones Lang La Salle, is US$3.0 million and accordingly, the parties agreed that the consideration for the Company’s 80% effective interest in PHL Land shall be US$2.4 million. SPA has agreed to waive its right to appoint a second independent valuer under the First Right of Refusal Deed dated 17 August 2006.

The Company intends to use its internal resources to fund the Proposed Acquisition.

PHGE is one of the Group’s main developments of residential units. PHGE offers a full range of independent facilities including a Gary Player designed 18-hole championship golf course, a clubhouse and other facilities.

Yoma Strategic Holdings said it intends to elevate PHGE’s facilities by building a hotel to accommodate golfers for international tournaments and to support golf tourism. With the significant growth of local and international businesses around the vicinity, quality facilities to hold meetings and banquets are in great demand. The hotel will become an integral part of PHGE which will add value to the whole estate and enhance the reputation of PHGE.

Under the Sale and Purchase Agreement, PHL will assign an 80% interest in the PHL Land to Yoma Development Group Pte Ltd, a wholly-owned subsidiary of the Company (YDG) and establish a new Myanmar company. Upon the establishment of the new Myanmar company, parties will procure that the rights of and interests in PHL Land be held by the new Myanmar company through a long term lease to be approved by the Myanmar Investment Commission and in exchange, YDG will be allotted and issued shares equivalent to 80% interests in the new Myanmar company. PHL will hold the remaining 20% interest.

Parties will fund the construction of the PHL Land by way of equity and debt. YDG’s pro rata contribution in the construction costs will be up to US$9,392,000.

Further, PHL has also agreed that it will procure that the rights of and interests in another plot of land which is in the vicinity of the PHL Land (which land size area is about 221.53 square metres) be held by the new Myanmar company at no additional consideration to YDG. Parties intend to develop this plot of land into a fitness and leisure centre for use by the hotel guests and residents of PHGE.