Commercial Credit parent to divest controlling stake in Myanmar micro lending subsidiary

Commercial Credit & Finance PLC’s parent BG Group last month signed a Memorandum of Understanding to potentially divest its controlling share in its Myanmar-based micro lending subsidiary BG Microfinance Myanmar Co. Ltd. (BGMM) to the Thai Stock Exchange listed leasing company, Group Lease Public Company Limited (GL).

GL’s announcement to the Stock Exchange of Thailand said that its Singapore-based subsidiary, Group Lease Holdings PTE. Ltd. (GLH), has signed a Memorandum of Understanding to conduct due diligence into BGMM to purchase 71.9 percent of the shares in BGMM.

BGMM has been in operation for 2 years, focusing on lending to the low income segments in Myanmar, with special focuses on lending to women, and to groups, with 50-week loan maturity periods which have repayments on a weekly basis.

GLH is expected to finish the due diligence procedure on October 7th, and will place a non-interest bearing deposit equal to US$ 1 million with Commercial Credit & Finance’s parent BG Group, which will be returned after agreements related to the transaction are finalized.

GL Group Director Tatsuya Konoshita said that GLH’s core business model of Digital Finance will be implemented on BGMM operations to increase growth.

According to the Commercial Credit & Finance annual report, BGMM’s investment income grew by 636.4 percent year-on-year (YoY) in the 2016 financial year to 319 million Myanmar Kyats.
A Myanmar Kyat stood at Rs. 0.1168 at the end of last week, according to the Central Bank of Sri Lanka.

BGMM’s net profit for the past financial year had been 148.9 million Myanmar Kyats, compared to a net loss YoY, while its total assets increased by 154.7 percent YoY to 1.4 billion Myanmar Kyats.
Commercial Credit & Finance’s investments in BGMM had been Rs. 52.9 million, amounting to approximately 37 percent of BGMM’s shares.