Tokyo Century Corp. will buy a fifth of Yoma Strategic Holdings Ltd.'s vehicle leasing business in a bid to expand in Myanmar and explore further collaboration with the Southeast Asian conglomerate.
The Japanese leasing services firm will buy a 20 percent stake in Yoma Fleet via newly issued shares for $26.6 million, Yoma Group said in a statement.
Myanmar's fast growing automotive market presents high potential for growth, said Yasushi Yoshino, executive officer at Tokyo Century. "We will also explore the possibility of further collaboration in other business areas of Yoma Strategic in coming years."
The funds will help the Yoma Group expand its vehicle leasing business, which is targeting asset under management of $200 million by 2023 versus $40 million as of last month, according to the statement.
Low vehicle penetration in a "largely cash-based" economy and limited bank lending outside of key cities has created opportunities in automotive and heavy equipment business and for nonbank lenders, said Melvyn Pun, chief executive officer at the Singapore-listed conglomerate. "The partnership will also explore other nonbank financial opportunities to better serve this huge, underserved market.
"In the future, Tokyo Century may want a larger stake and I will be not against that," Pun said in an interview, adding that the Japanese company owns about 50 percent of some of its ventures in Asia.
The group is also working toward pursuing similar partnerships at the subsidiary level in nonbank lending, real estate and mobile payment platforms by the end of 2020, he said.
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