Yoma Strategic said on Monday that its wholly owned subsidiary, Yoma Fleet, entered an agreement for an exclusive partnership with Myan Shwe Pyi Tractors, or MSP CAT, which is the authorized dealer for Caterpillar-branded heavy equipment in Myanmar.
Yoma Fleet, which has an automotive and heavy equipment financing platform, will help support MSP CAT’s retail and rental business as well as provide funding for its customers, the filing to SGX around midday Monday said.
“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,” Yoma said in the statement. It noted the Myanmar government plans to allocate US$21.4 billion to rail, road, port and aviation projects by 2030.
“The partnership aims to capture meaningful opportunities to provide finance in support of this expected growth,” it said.
Yoma Fleet will initially finance MSP CAT’s existing rental portfolio for around US$7 million, including 71 pieces of heavy equipment, of which 63 are Caterpillar machines, it said. Yoma Fleet will also become the “preferred financing partner” for MSP CAT customers, it said.
Melvyn Pun, CEO of Yoma Strategic, said the deal offered a “unique” chance to access MSP CAT’s wide distribution network.
“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,” Pun said.
“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,” he added.