GL Partnering U Aung Moe Kyaw (AMK) Owner of Century Finance & Group Chairman of Myanmar Distillery Company Limited in Major Myanmar Expansion
13 Oct 2016
SET-listed digital finance firm Group Lease Public Company Limited (GL) is taking another important strategic move by partnering with U Aung Moe Kyaw (AMK) and other investors (AMK Consortium) to launch a major expansion of financial services in Myanmar.
Under the new partnership, GL will set up a joint venture company with the AMK Consortium. . This joint venture will support Century Finance Company Limited, a Myanmar finance company owned by AMK, to provide a broad range of financial services to the booming Myanmar markets, especially for people in the rural countryside.
GL, through its holding company in Singapore GL Holdings (GLH) will hold 57% in the new JV company while AMK and Consortium will take up the other 43%. The new company is expected to be established by the end of this year or in early 2017.
“We are very pleased to enter into this collaboration with U Aung Moe Kyaw and his partners,” GL Chairman & Chief Executive Officer Mr. Mitsuji Konoshita stated at an MOU Signing Ceremony with U Aung Moe Kyaw in Bangkok on October 13. “This is a win-win partnership because our expertise and efficiency in digital finance will combine and complement with U Aung Moe Kyaw’s extensive network throughout Myanmar,” he added.
According to GL’s official filing with the SET on October 13, AMK Consortium is currently controlling approximately 65% in the whisky distribution and managing more than 22,000 grocery shops in Myanmar, including 1,400 wholesale shops some of which are already operating pawnshop businesses. This distribution network is the biggest in Myanmar in terms of number of outlets, which will perfectly match with GL’s digital finance platform.
Mr. Konoshita noted that as GL has already proven in Cambodia with True Money, GL’s digital finance business model is the only model that can utilize 100% benefits from AMK Consortium’s extensive agents network.
Therefore, the business model in Myanmar will be a mixture of the “Channeling Services” model in Indonesia where GL partners with Bank JT and the “Agent” model in Cambodia with True Money. “These business models are quite new, unique and innovative. Combining them together, we shall be able to effectively provide a wide range of financial services for the benefits of the Myanmar people, especially those in the rural grassroots areas,” Mr. Konoshita stated.
Century Finance, one of Myanmar’s 15 non-bank finance companies licensed by the Myanmar central bank, currently provides car leasing services.
With GL’s expertise and support, Its range of financial services will now broaden to cover the leasing of motorcycles, agricultural machinery and solar panels and other consumer finance credit under “channeling services” managed and provided by the new joint venture company.
GL’s latest partnership with the AMK Consortium comes after its recent take-over of BG Myanmar Microfinance (BGMM). The new joint venture company, therefore, completes the full range of financial services and products that will be offered to the Myanmar markets – from small microfinance loans through BGMM to big-ticket items like rice-harvesting machines through Century Finance.
The full-scale expansion into Myanmar comes in the face of a booming local economy following the lifting of US economic sanctions after extensive local political reforms. For GL, the latest partnership with AMK Consortium has also come following its successful expansion from its home base in Thailand into neighboring Cambodia, Laos, Indonesia and Sri Lanka.
The successful expansion has resulted in steadily increasing revenue and profitability. For instance, its Q2 net profits of 255.85 million baht nearly doubled from the same period last year and represented the seventh consecutive quarter of new record highs. Company executives have expressed confidence that profits will continue to scale new heights in the medium and longer-term future.
We express our deepest condolences over the demise of King Bhumibol Adulyadej of Kingdom of Thailand
13 Oct 2016
Mr. Mitsuji Konoshita, Chairman & CEO delivers statements over the demise of HM King Bhumibol Adulyadej of Kingdom of Thailand.
It is with deepest sorrow to learn from the Royal Household Bureau that HM King Bhumibol Adulyadej has passed away peacefully on 13th Oct 2016. Throughout his 70-year reign, King Bhumibol Adulyadej was the greatest King who was well-loved by the people of Thailand and appreciated all around the world. His accomplishments are so huge that the people of Thailand are filled with immeasurable sorrow. We are grateful to His Majesty to provide to our group the opportunity to be established and prosper in His Kingdom for more than 19 years.
We wish to pay gratitude to His Majesty’s greatness by continuing the development of our businesses in the Kingdom of Thailand and also wish to express our heartfelt condolences on the passing of His Majesty.
Chairman & CEO
And Management & staff
Group Lease Public Company Limited
GL Takes 29.99% in Leading Sri Lanka Finance Firm, Expects to Book US$7M Profits Annually
03 Oct 2016
After a spate of aggressive expansion in ASEAN, SET-listed digital finance company Group Lease Public Company Limited (GL) is now extending its business footprint to outside the region by acquiring a substantial stake in a leading Sri Lankan finance institution registered by the Sri Lanka Central Bank which is highly profitable and listed on the Colombo stock exchange.
According to GL Chairman and CEO Mitsuji Konoshita, GL’s latest decision to buy 29.99% of Commercial Credit & Finance Plc (CCF) will further enhance the strategic partnership between the two groups. “We will combine GL’s efficient digital finance platform with CCF’s successful microfinance model to grow our businesses in all markets where we are and will be present. This acquisition will bring estimated consolidated profits of about US$ 7 million annually starting immediately in Q4 this year,” Mr. Konoshita said.
Mr. Konoshita also noted that GL, through its subsidiary in Singapore GL Holdings (GLH), will potentially have the rights to acquire the remaining 70% in CCF should the CCF shareholders decide to sell in the future under a special clause on the first rights of refusal stipulated in the shareholders agreement.
The acquisition valued at US$ 70 million marks GL’s first major expansion outside of the ASEAN region. From its home base in Thailand, GL has expanded successfully into Cambodia, Laos Indonesia and, more recently, Myanmar.
In the same exercise as the CCF acquisition, GLH is also acquiring full ownership of CCF’s microfinance subsidiary in Myanmar – BG Microfinance Myanmar Co Ltd (BGMM). GLH in early September bought 71.9% shares in BGMM and is now buying up the remaining 28.1% from CCF to gain complete control.
At a shares sale/purchase agreement signing ceremony in Bangkok to effect both transactions on October 3, the GL Chairman Mr. Konoshita said the CCF acquisition in particular will have a significant impact on the group’s profitability right away since earnings from CCF will be consolidated into GL’s accounts starting in the current Q4.
CCF has an assets size of about US$ 500 million compared to GL’s roughly US$ 450 million although the latter’s market capitalization is substantially larger than that of CCF owing to the solid strength and popularity of the Thai stock market compared to the less developed Sri Lanka stock exchange. CCF has projected a net profit of US$ 22 million this year.
Mr. Konoshita noted that GL will have some representation on the CCF Board but will allow the current management a free hand in continuing to run the company because the management is very effective. “This is a mature company with perfect management. We may support by introducing supplementary businesses such as e-payment, e-commerce or insurance,” he said.
The shares sale/purchase agreement signed on October 3 takes immediate effect conditional on the approval of the relevant authorities in both countries, endorsement by the Extraordinary Shareholders Meeting (EGM) and also the Independent Financial Advisors (IFA) report.
Mr. Konoshita stated that the GL-CCF relationship is a win-win strategic partnership giving synergies to both sides. “Our digital finance platform can nicely enhance their expertise and knowhow in microfinance; while their need to access to capital can easily be met by our capability to raise funds internationally,” he added.
Mr. Konoshita stressed that the new partnership with CCF will produce highly positive impact on GL’s revenue and earnings in the future because the “group finance” model which has been successfully developed in the microfinance heartlands of Sri Lanka and Bangladesh will help to vastly increase GL’s traditional markets of consumer finance and hire-purchase in the region and elsewhere.