This document discusses sourcing and structuring financing for joint ventures and other business forms in Myanmar. It provides an overview of All Myanmar Investment Partners (AMIP) and its role advising investors. AMIP is part of Indochina Opportunity Partners (IOP), a private equity fund focused on opportunities in Southeast Asia, including Myanmar. The document outlines IOP's network and backing. It also discusses the challenges and opportunities of investing in Myanmar's developing business environment, and considers different options for structuring investments and sourcing financing, including from friends/family, family offices, corporations, and development institutions.
1. Sourcing & Structuring Financing
for JV and other Business Forms
October
2012
IOP
INDOCHINA
OPPORTUNITY
PARTNERS
1
2. AMIP
OVERVIEW
All
Myanmar
Investment
Partners
(AMIP)
is
a
specialised
investment
and
business
advisory
firm
exclusively
dedicated
to
developing
business
opportuni@es
in
Myanmar
PRIVATE
EQUITY:
AMIP
–
together
with
Dragon
Capital
&
FIDP
–
is
part
of
Indochina
Opportunity
Partners
(IOP)
IOP
has
established
the
Indochina
Opportuni5es
Fund
(IOF)
BUSINESS
ADVISORY:
Inbound
investors:
Structuring
and
overall
strategic
advisory
Local
Corporates:
Corporate
Finance
advisory
3. INDOCHINA
OPPORTUNITY
PARTNERS
• Indochina
Opportuni@es
Fund
is
a
$250m
IOP OFFICE NETWORK
fund
–
minimum
20%
(or
$50m)
is
allocated
to
Myanmar
through
AMIP
INDIA
CHINA
• IOP
leverages
the
combined
infrastructure
of
Dragon
Capital
and
FIDP
in
the
Indochina
region,
giving
it
insider
status
VIETNAM
MYANMAR
• Office
network
spread
over
six
regional
LAOS HANOI
major
ci@es
(and
one
loca@on
pending),
VIENTIANE
with
professional
staff
YANGON
• Dragon
Capital
provides
major
back-‐office
THAILAND
support
in
terms
of
legal,
research,
BANGKOK
accoun@ng,
admin
from
its
Ho
Chi
Minh
city
CAMBODIA
headquarters
PHNOM
PENH HO CHI
MINH
• It
also
provides
strong
sponsor
backing
via
CITY
IOP Office
a
$10m
commitment
as
co-‐anchor
investor
Pending
IOP Office
of
the
Fund,
alongside
Interna@onal
Non-Indochina
SINGAPORE
Financial
Corpora@on
(IFC)
–
part
of
the
World
Bank
Group
4. PRIVATE
EQUITY
POTENTIAL
FOR
MYANMAR
• Cash
based
economy
• Very
li]le
bank/ins@tu@onal
• Poli@cal
reform
financing
op@ons
• Economic
reform
• Most
growth
is
organic
• Liberalisa@on
polices
Vast
central
bank
Scarcity
of
PotenFal
independence,
Capital
financial
services
Other
Drivers
Reform
• Starved
of
growth
capital
• Produc@vity
gains
through
• 2013 SEA Games & technology
and
knowledge
World Economic Forum transfer
with
minimum
CapEx
• 2014 ASEAN Presidency • Favourable
demographics
and
• 2015 ASEAN FTA geography
5. BUT…
CHALLENGES
LEGAL
&
REGULATORY:
• Where’s
the
Law?
• The
Exit?
But
first
how
about
the
Entrance?
INFRASTRUCTURE:
• Power
• TransportaFon
• CommunicaFon
• Market
Data
LOCAL
COMPANIES:
• ValuaFon
• Due
Diligence
• Big
Emphasis
on
“Trust”
and
“Seeing
Eye-‐to-‐Eye”
6. STRUCTURING
THE
VEHICLE
Myanmar Investment Commission Myanmar Companies Act
Holding Holding Company
Company Offshore
Investment SPV
100% owned
Myanmar
Company 100% JV Company Myanmar JV Company
owned Incorporate
7. THE
MIC
&
JV
ROUTE
Foreign
Investor
Local
Company
Investment
$$$
Opera@onal
Licenses
Technology
Regulatory
Knowledge
Knowledge
Exis@ng
Overheads
and
Support
Interna@onal
Markets
Local
Market
Knowledge
8. FINANCING
CONSIDERATION
Financing
Considera@ons
i.
Friends,
Family
and
Contacts
§ Ini@ally,
most
likely
source
of
funding
for
fron@er
economies
§ Characteris@cs:
Undefined
§ High
in
volume
Risks
§ Accoun@ng
for
smaller
deals
Beng
on
Loose
or
No
§ Most
<
US$
5
mil
You
RegulaFons
Trust
§ Advantages:
§ Quick
to
understand
concept
/
get
deal
done
No
Track
Evolving
business
§ Limited
legal
/
structuring
considera@ons
Record
plan
Unchartered
§ Limita@ons:
Territory
§ Can
be
hands
on
/
unsophis@cated
investors
§ Tenure
could
be
shorter
§ Limited
follow
on
capital
9. FINANCING
CONSIDERATION
Financing
Considera@ons
ii.
Family
Offices
§ The
next
likely
source
of
Funding
§ Characteris@cs:
Undefined
§ Largely
decided
by
one
investment
professional
Risks
§ Accoun@ng
for
small
/
mid-‐size
deals
Beng
on
Loose
§ Most
<
US$
10
mil
Wild
Card
RegulaFons
OpportunisFc
§ Advantages:
§ Rela@vely
quick
to
understand
concept/
Evolving
No
Track
get
deal
done
Record
business
plan
§ Flexible
on
legal
/
structuring
considera@ons
Unchartered
Territory
§ Limita@ons:
§ Limited
follow
on
capital
§ Likely
milestones
need
to
be
met
§ Tying-‐in
with
core
business
that
funds
family
office
10. FINANCING
CONSIDERATION
Financing
Considera@ons
iii.
Corporates
• Difficult
source
of
funding
• Characteris@cs:
Undefined
Risks
• Likely
focused
on
specific
business
opportunity
• Accoun@ng
for
variety
of
sizes
Beeng
on
Regulated
• Most
>
US$
5
mil
+
LT
Growth
• Advantages:
Strategic
• Brings
knowledge
/
technology
transfers
Some/
• Experienced
operators
Evolving
Limited
business
• Ability
for
follow
on
investments
Track
plan
Record
Unchartered
• Limita@ons:
Territory
• Slow
to
make
decisions
• Limited
ability
to
react
quickly
to
market
11. FINANCING
CONSIDERATION
Financing
Considera@ons
iv.
Developmental
InsFtuFons
• Good
opportunity
for
fron@er
markets
• Characteris@cs:
Undefined
• Accoun@ng
for
variety
of
sizes
Risks
• Most
<
US$
2mil
and
>
US$
50
mil
+
Beeng
on
Regulated
Enhancement
• Advantages:
Development
• Mandated
to
develop
fron@er
markets
Driven
• Understanding
of
country
situa@on
Defined
Limited
• Ability
for
follow
on
investments
Record
Business
Plan
• Poli@cal
coverage
Based
Previous
Investments
• Limita@ons:
• Slow
to
make
decisions
• Can
be
poli@cally
sensi@ve
• Tendency
to
replicate
previous
models
12. FINANCING
CONSIDERATION
Financing
Considera@ons
v.
TradiFonal
Financial
Players
• Unlikely
source
of
investment
ini@ally
• Characteris@cs:
Undefined
• Likely
focused
on
large
projects
Risks
• Prefer
liquid
investments
Beeng
on
Low
Risk
/
Regulated
• Most
>
US$
20
mil
+
High
Return
Alterna@ve
• Advantages:
Investment
• Quick
to
invest
No
Track
Developed
Business
• Sophis@cated
investors
Record
Plan
Unchartered
• Limita@ons:
Territory
• Lack
of
local
market
knowledge
• Complex
structures
• Sensi@ve
to
longer
tenures
• Conserva@ve
investors
13. Thura
Soe
Paing
Managing
Director
Email:
thura@allmyanmarinvestment.com
Tel:
(95)
9
731
20887