Jul 25, 2012

Max Myanmar Group proposes S$70m reverse takeover of Aussino

Myanmar business group Max Myanmar has announced a S$70 million proposed reverse takeover of Singapore-listed Aussino Group.

Aussino said the move could see it transform from a bed linen maker into an operator of petrol kiosks in Myanmar.

Under the agreement, Aussino will acquire the entire issued share capital of Max Strategic Investments (MSI), an investment holding company incorporated in Singapore, from Max Myanmar Group (MMG).

After the acquisition, MSI plans to operate petrol kiosks by buying over Max Myanmar's energy business unit.

Max Myanmar currently operates 21 petrol kiosks across various cities in Myanmar, including Naypyidaw, Yangon and Mandalay.

In exchange, Aussino will issue about 219 million new consolidated shares to MMG at 32 Singapore cents each.

Aussino says the deal is aimed at tapping into the high growth potential of the energy sector in Myanmar.

It expects Myanmar's energy sector to flourish as the country pushes ahead its economic and political reforms, and as Western powers ease their sanctions on Myanmar.

Anthony Lim, chairman and CEO of Aussino Group, said: "We believe that the acquisition of Max Strategic Investments, which operates the petrol kiosks and the energy sector in Myanmar, will give Aussino shareholders value. We believe that the value of the company will be greatly enhanced."

For the financial year ended March 31, 2012, MSI has reported a revenue of S$93.2 million and a net profit of S$5.2 million.

PrimePartners, a boutique advisory and asset management firm, has been appointed to assist Aussino to get the necessary regulatory approval needed for the deal to be completed.

However, there remains some doubt as to whether the deal could be completed.

Max Myanmar is currently headed by Myanmar businessman Zaw Zaw, who is on the US government's Specially Designated Nationals (SDN) list because of his business ties with former Myanmar military leader Than Shwe.

Individuals and organizations on the SDN list are not allowed to conduct business dealings with US citizens and permanent residents.

Singapore does not impose sanctions on Myanmar.

"We will have to conduct a very rigorous due diligence exercise on MSI, including its controlling shareholders," Mark Liew, managing director of corporate finance at PrimePartners, said.

"But simply because the promoter, Zaw Zaw, is on the (SDN) list, it does not disqualify MSI from doing its listing in Singapore. It is an issue that we will have to address, but we don't think that it is an issue that cannot be addressed."

PrimePartners says the process to acquire all the necessary regulatory approval for the deal to go through is estimated to take about six to eight months.

Source:  CNA/wm