HG Metal commits to majority stake in joint venture in Myanmar

HG METAL Manufacturing will take a majority stake in and to capitalise a joint venture in Myanmar, according to details of an agreement announced by the steel products maker on Thursday before the market opened.

Under the terms of the agreement, HG Metal will pay US$95,700 to Singapore-incorporated holding company Fortune Peak Investments for a 51.04 per cent stake in First Fortune International Co, a company that will undertake cut and bend, and fabrication services in Myanmar. The acquisition will reduce Fortune Peak's stake in First Fortune to 28.96 per cent, with Myanmar aluminium and glass company, YNJ Engineering Co, holding First Fortune's remaining 20 per cent stake.

Upon completion of the acquisition, the three shareholders of First Fortune will commit to subscribe for US$11.3 million of additional shares proportionate to their shareholdings, of which US$3.8 million will be tapped shortly after the acquisition is completed. The remainder of the capital commitment will be called progressively.