Yoma Strategic Holdings Ltd. has announced that Yoma Fleet, the automotive and heavy equipment financing platform which is a wholly-owned deemed subsidiary of Yoma Strategic, has entered into a framework agreement establishing an exclusive partnership with Myan Shwe Pyi Tractors Limited (MSP CAT) which is the authorized dealer for Caterpillar branded Heavy Equipment in Myanmar and the partnership will support its retail and rental business as well as provide funding for its customers, according to a statement.
Myanmar has a substantial need for infrastructure development. In line with government policy, a number of large-scale infrastructure projects are currently in the pipeline or in progress. These projects include power stations, ports, special industrial zones, and upgrades to existing transportation networks. Under its National Transport Master Plan, the Myanmar Government is planning to allocate US$21.4 billion to rail, road, port and aviation projects by 2030.
In addition, the recent resource industry reforms aimed at encouraging investment in the sector are expected to lead to a period of growth as the industry returns to full production during the coming years.
The partnership aims to capture meaningful opportunities to provide finance in support of this expected growth. Yoma Fleet will initially finance MSP CAT’s existing rental portfolio for an amount of approximately US$7 million, which includes 71 pieces of Heavy Equipment of which 63 are Caterpillar machines. In addition, Yoma Fleet will become the preferred financing partner for customers of MSP CAT.
Mr. Melvyn Pun, CEO, Yoma Strategic said, “Our partnership with MSP CAT represents a unique opportunity to access MSP CAT’s wide distribution network to support the infrastructure and construction sectors, especially in relation to their dealership rights for Caterpillar. At a time when we are anticipating a huge pick-up in infrastructure build-out as well as a resurgent mining sector, we expect this partnership to provide scalable financial returns for our Yoma Financial Services division in the years to come.”
“This deal marks us out as a first mover in the financing of construction equipment and heavy machinery in Myanmar. In both the infrastructure and construction sectors, the lack of financing for mechanisation has historically been a major bottleneck to growth,” added Mr. Pun.