YOMA Strategic Holdings is staying in business with the new majority owner of its joint venture telco tower business in Myanmar, but has obtained options to protect its downside if the relationship does not work out.
Malaysia-based Edotco Investments (Labuan) in October agreed to buy Digicel Group's 75 per cent stake in Digicel Asian Holdings, a joint venture between Yoma and Digicel created to build and lease wireless towers in Myanmar. Yoma owns the remaining 25 per cent.
Digicel's sale to Edotco, a unit of Malaysia-based communications infrastructure company Axiata Group, was conditional upon consent from Yoma, among others.
In giving its consent, Yoma has extracted a put-and-call agreement with Edotco that sets a floor of US$40.25 million if either Yoma or Edotco decide to discontinue the partnership within five years, subject to certain moratorium periods.
That put-and-call agreement gives Yoma the right to demand to sell to Edotco, or Edotco the right to demand to buy from Yoma, Yoma's 25 per cent stake in the joint venture.
The consideration for that stake will be the higher of US$40.25 million; or an enterprise value of the joint venture based on 9.8 to 12.4 times of the joint venture's earnings before interest, tax, depreciation and amortisation and its trailing 12-month actual performance.
The US$40.25 million floor itself is based on the US$221 million enterprise valuation that was the basis for Edotco's purchase of Digicel's stake.