All Myanmar Investment Partners (AMIP) Indochina Opportunity Partners (IOP) October 2012

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