Tokyo Century Buys Stake in Yoma Strategic Auto Leasing Unit
2019-04-28 10:03 Sunday
To expand the business reach in Myanmar and explore collaboration opportunities with Southeast Asian conglomerate, Tokyo Century Corp. intends to buy a fifth of Yoma Strategic Holdings Ltd.'s vehicle leasing business.
According to the statement from Tokyo Century Corp, the Japanese leasing services firm will buy a 20% stake in Yoma Fleet via newly issued shares for $26.6 million
Attracted by the fast-growing market and promising growth potentials in Myanmar's automotive market, Tokyo Century is confident for the future development in Myanmar. "We will also explore the possibility of further collaboration in other business areas of Yoma Strategic in coming years." said Yasushi Yoshino, executive officer at Tokyo Century.
The funds will help the Yoma Group expand its vehicle leasing business, which is targeting asset under management of $200 million by 2023 versus $40 million as of last month, according to the statement.
Low vehicle penetration in a "largely cash-based" economy and limited bank lending outside of key cities has created opportunities in automotive and heavy equipment business and for non-bank lenders, said Melvyn Pun, chief executive officer at the Singapore-listed conglomerate. "The partnership will also explore other non-bank financial opportunities to better serve this huge, underserved market."
"In the future, Tokyo Century may want a larger stake and I will be not against that," Pun said in an interview, adding that the Japanese company owns about 50 percent of some of its ventures in Asia. The group is also working toward pursuing similar partnerships at the subsidiary level in non-bank lending, real estate and mobile payment platforms by the end of 2020, he said.