Myanmar Times August 3, 2015
Military-Linked Myanmar Economic Holdings Limited (MEHL) has asked a Singapore court to order its partner in Myanmar Brewery to sell its stake by August 20, according to a statement.
Myanmar Brewery is the country’s leading brewer, churning out Myanmar Beer as well as Tiger Beer under contract.
The dispute stems from the 2012 sale of control of Singapore-listed Fraser and Neave, which is MEHL’s partner in Myanmar Brewery.
In 2014, MEHL won a ruling from a Singapore arbitration tribunal that its right of first refusal on its partner’s shares in the brewery had been ignored with the 2012 sale.
Fraser and Neave’s 55 percent stake was subsequently valued at K500 billion last month, though the dispute has continued as the two sides disagree on the date at which the exchange rate should be calculated.
Fraser and Neave’s position is that the sale should be completed in US dollars based on the exchange rate from April 30, 2013, which would value the K500 billion stake at US$560 million.
MEHL would prefer to use a 2015 exchange rate, determined from the day before the completion of the sale, which would put the same 55pc stake at about $400 million. This means it would have to pay signficantly less for the same stake.
MEHL has now filed an originating summons in the Singapore High Court to force Fraser and Neave to transfer its stake to MEHL by August 20 upon payment of K500 billion, according to a statement Fraser and Neave released on July 31.
Fraser and Neave said that by its partner refusing to complete the sale at $560 million, “MEHL has not abided by, evinced an intention not to abide by, and has breached, its obligations.”
“[Fraser and Neave] has notified MEHL that it has elected to, and shall, remain as a shareholder of [Myanmar Brewery],” the statement said.
Though Myanmar Brewery is the market leader, it is also facing growing competition.
Foreign brewers Carlsberg and Heineken have both opened Myanmar breweries this year.
