Value of F&N's Myanmar asset settled

Singapore

THE clock is ticking for beverage company Fraser and Neave (F&N) to sell to Myanma Economic Holdings its 55 per cent stake in Myanmar Brewery Limited - their joint venture company.

But contention is brewing among the two firms on the exact transaction sum of the deal in US dollars.

On Wednesday, an independent third-party valuer which was jointly appointed by Myanma Economic Holdings and F&N, released its fair value estimate of F&N's stake in Myanmar Brewery, which stands at 500 billion kyat (approximately S$549.2 million).

Based on an April 2013 kyat-US dollar exchange rate applied by the valuer, F&N on Wednesday said in a statement that its 55 per cent stake in Myanmar Brewery is estimated at US$560 million.

In a Thursday statement, Myanma Economic Holdings, a military-linked Myanmar conglomerate, said that it "stands ready and willing" to conclude the sale and purchase of F&N's stake at 500 billion kyat within the 30-day period ordered by the arbitral tribunal. But it disagrees with F&N's position that the sale should take place in US dollars at the 2013 exchange rate.

Regardless of the outcome, the latest fair value estimate represent a significant improvement from the original US$246 million offer from Myanma Economic Holdings to F&N in 2013.

Myanma Economic Holdings had in 2013 commenced arbitration to seek an order that F&N was obliged to sell its stake in Myanmar Brewery to the former following F&N's breach of obligations under the joint venture agreement.

Rumours have circulated in the market that the breach is related to the change in shareholding structure of F&N after a takeover by two companies controlled by Thai billionaire Charoen Sirivadhanabhakdi, including Thai Beverage PCL.

In October 2014, the arbitral tribunal allowed Myanma Economic Holdings' claim and ordered F&N to sell its 55 per cent stake in Myanmar Brewery to Myanma Economic Holdings or its nominee at a valuation to be determined by an independent third party valuer.

On Thursday, F&N's counter closed trading up 1.18 per cent, or three Singapore cents, at S$2.58.