Wednesday, May 03, 2017
The
construction and real estate conglomerate Shwe Taung Group is close to
striking a deal with the private lending arm of the World Bank to
secure funding for its cement production.
The International Finance Corporation is considering providing the company with a $15 million equity injection for a brownfield project run by its subsidiary, the Shwe Taung Cement Company.
The deal would also see the IFC invest $20 million in the form of debt capital to help fund the expansion of one of Shwe Taung’s plants in Mandalay region.
The $110 million upgrade at Pyi Naung village in Thazi would also be funded with other loans, equity from other sponsors and internal accruals, the company said in a disclosure document.
The plant can produce 1,500 tonnes of clinker, the raw material that is ground down to make cement powder, per day. It also has the capacity to grind 2,800 tonnes of cement each day.
The financing from the IFC would help the plant expand its capacity to produce 5,500 tonnes of clinker and 7,200 tonnes of cement a day.
Shwe Taung said in its disclosure document that it required long-term financing because the cement industry was cyclical, leaving it vulnerable to periods of low revenues that made it difficult to invest.
“The proposed IFC investment and mobilizations will bridge this gap and provide the necessary financing to the Company,” the disclosure document said.
The lender is also considering providing long-term finance with the aim of helping the company to compete with the growing number of international companies.
Several foreign firms have entered Myanmar in recent years as demand for cement surges amid a construction boom. Thailand’s Siam Cement Group is planning a $5.8 million project while Japan’s IHI Corp has partnered with the government for a $15 million cement factory.
Shwe Taung Group is involved in major construction projects in Yangon, including the newly-opened Junction City, a huge downtown complex including a shopping mall, cinemas and offices.
Source: Myanmar Business Today
The International Finance Corporation is considering providing the company with a $15 million equity injection for a brownfield project run by its subsidiary, the Shwe Taung Cement Company.
The deal would also see the IFC invest $20 million in the form of debt capital to help fund the expansion of one of Shwe Taung’s plants in Mandalay region.
The $110 million upgrade at Pyi Naung village in Thazi would also be funded with other loans, equity from other sponsors and internal accruals, the company said in a disclosure document.
The plant can produce 1,500 tonnes of clinker, the raw material that is ground down to make cement powder, per day. It also has the capacity to grind 2,800 tonnes of cement each day.
The financing from the IFC would help the plant expand its capacity to produce 5,500 tonnes of clinker and 7,200 tonnes of cement a day.
Shwe Taung said in its disclosure document that it required long-term financing because the cement industry was cyclical, leaving it vulnerable to periods of low revenues that made it difficult to invest.
“The proposed IFC investment and mobilizations will bridge this gap and provide the necessary financing to the Company,” the disclosure document said.
The lender is also considering providing long-term finance with the aim of helping the company to compete with the growing number of international companies.
Several foreign firms have entered Myanmar in recent years as demand for cement surges amid a construction boom. Thailand’s Siam Cement Group is planning a $5.8 million project while Japan’s IHI Corp has partnered with the government for a $15 million cement factory.
Shwe Taung Group is involved in major construction projects in Yangon, including the newly-opened Junction City, a huge downtown complex including a shopping mall, cinemas and offices.
Source: Myanmar Business Today
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