Two million shares of the Myanmar Thilawa Special Economic Zone Holdings Public Ltd will help to raise the necessary funds to begin build the first phase of the project, while additional funds will be picked up through the issuance of early leasing contracts.
“We are going to work with the minimum amount of initial capital possible, that is, the proceeds of 2.14 million shares valued at more than $21 million,” said UMFCCI and Myanmar Thilawa SEZ Holdings chair U Win Aung, adding that more shares may be issued in the future to cover costs if needed.
“Our aim is to reinvest the money into development,” he said.
With regards to property leasing, he would not state what land in the SEZ would cost though U Win Aung reassured that “the price would be much cheaper than in other local industrial zones”, adding that his firm has already received several letters of intent from companies in the garment, food processing and manufacturing sectors.
According to the current SEZ law, lease agreements can be signed for up to 70 years.
The 2400-hectare zone, which broke ground in November, is about 25 kilometres south of Yangon along the Yangon River in Thanlyin and Kyauktan townships.
The zone is being developed by a Japanese consortium as a 39pc shareholder with participation from Mitsubishi, Marubeni and Sumitomo corporations, and locally run Myanmar Thilawa SEZ Holdings (MTSH), who have 41pc of the shares. An additional 10pc of the project belongs to the Thilawa SEZ management committee, while the remaining shares belong to the Japan International Cooperation Agency (JICA).
Japan will provide ¥20 million (US$3.28 billion) for the related infrastructure, electrical systems, ports and transportation.
Economist U Hla Maung said that because the standing investment offer only pertains to construction, as opposed to manufacturing products for retail, it would be difficult to predict potential yields as some potential investors may consider spending elsewhere.
“Myanmar investors in local public companies don’t receive much in dividends even now,” he said.
source: The Myanmar Times