Bangkok--8 Jan--Master Mind Communications
L.V. Technology Public Company Limited (LVT), an MAI-listed company specializing in engineering consultancy services with ongoing operations in various parts of the world, is pushing ahead with ambitious new investments in Myanmar after shareholders approved a major capital-increase package at an extraordinary shareholders meeting (EGM) yesterday (Jan 7, 2013).
The latest shareholders decision will effectively raise about 280 million baht in new proceeds in the near term plus another sum of about 216 million baht within one year from now. LVT founder and president Hans Jorgen Nielsen stated that the bulk of the new proceeds will be used to invest in the cement industry in Myanmar, particularly in new assets that can generate recurrent income and profitability for the company into the longer term future.
According to filing with the Stock Exchange of Thailand (SET) today (Jan 8, 2013), the capital-increase package approved at yesterday’s EGM comprises of three portions: the allocation of 172,846,175 new shares for existing shareholders at the ratio of 3 old shares for 1 new share at 1.25 baht each, the allocation of 172,846,175 units of free warrants at the same 3:1 ratio that can be converted into the same amount of shares within one year at 1.25 baht each, plus another 51 million new shares that are being set aside for private placement (PP) at prices no less than 1.25 baht each.
“This is an important step forward for LVT because it (the capital increase) will enable us to make important new investments in the booming cement industry in Myanmar,” Mr. Nielsen stated after the EGM. LVT has traditionally derived its revenue from engineering consultancy works; proceeds from the latest capital increase will effectively enable the company to invest in fixed assets, namely cement plants, in Myanmar that can generate recurrent revenue and profitability for the longer-term future, Mr. Nielsen stated.
Like most other analysts, LVT executives are bullish on the strong growth potentials of Myanmar’s cement industry. According to the company’s projections, the country had a cement shortfall of roughly 5 million tons last year (2.2 million tons production against 7 million tons demand), which were met by imports. Due to the booming economy, the shortfall is expected to increase to about 7 million tons in 2015 (demand of about 12 million tons against local production of 5 million tons).
The company is also confident that it is in a more advantageous position than other foreign companies to make new investments in Myanmar because of its extensive experience and good connections. “We have been working intensively in Myanmar for the last five years and have built up solid connections both in the government and private sectors. New (foreign) companies operating in the country will find it difficult to cultivate such connections,” Mr. Nielsen stated.
LVT is currently undertaking two major engineering-services projects in Myanmar: the upgrading of an old cement plant near the new capital of Naypyidaw from the (inefficient) wet process into (more modern and efficient) dry process for the Max Manufacturing Group and the construction of a brand-new cement plant in the Shan State for the Kambawza Group in which LVT also holds an indirect, minority equity stake. Both Max Manufacturing and Kambawza are leading business and industrial conglomerates in Myanmar.
Distributed for L.V. Technology Public Company Limited by Master Mind Communications Co., Ltd.
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