Statement re. proposed acquisition of MIL

18 June 2019

Myanmar Strategic Holdings Ltd.

("MSH" or the "Company" or the "Group")

 Statement re. proposed acquisition of Myanmar Investments International Limited

The Board of Myanmar Strategic Holdings (LSE: SHWE), an independent developer and manager of consumer businesses located in Myanmar, notes the strategic and business update published by Myanmar Investments International Limited (AIM: MIL) dated 7 June 2019, which announced, inter alia, that "the Board has decided to concentrate on developing our current investments to optimise their return potential and look to harvest the value in these investments over the next few years. It is unlikely that the Company will consider any new investments whilst uncertainty continues to persist."

The Board of MSH also notes that a block trade of MIL's shares by Stewart Investors Asia Pacific Fund accounting for 9.6% of MIL's issued ordinary share capital was conducted on 30 April 2019, at a price of US$0.61 per share (Source: Bloomberg), signaling, the board of MSH believes, that certain MIL shareholders may be actively seeking liquidity options for their investments in MIL.

The Board of MSH has recently made an indicative proposal to the Board of MIL suggesting a combination of MSH and MIL. The Board of MSH is disappointed to note that the Board of MIL has failed to progress MSH's proposal.

The Board of MSH believes that a combination of MSH and MIL would generate significant value to both companies and their respective shareholders by:

·    preserving the legacy and the goodwill of the MIL and the MSH franchises;

·    unlocking further value within the MIL and MSH investment portfolios;

·   leveraging the experience of the MSH team and the combined investor base in M&A and ECM transactions to maximise the value of each company's investments;

·   accessing a portfolio of attractive investment and consolidation opportunities in high-growth sectors such as microfinance, consumer retail, education, hospitality and security;

·    attracting, developing and retaining high quality talent as one of the leading employers in Myanmar;

·    driving significant revenue and cost synergies through the cross-fertilisation of customer bases and the removal of duplicated functions and expenses;

·    potentially generating greater liquidity for shareholders by virtue of a larger market capitalisation; and

·    improving the overall attractiveness of the combined business to new investors thanks to the significantly larger size and a diversified portfolio of operating businesses and strategic investments.

MSH's indicative proposal to the Board of MIL comprised a cash and share offer to be effected by way of a British Virgin Islands Scheme of Arrangement or Takeover Offer. Shareholders should note that the UK Takeover Code would not apply to any acquisition of MIL by MSH.

MSH's indicative proposal would value MIL at US$0.75 per share, an implied premium of 23% vs. the block trade conducted on 30 April 2019 at US$0.61 per share, comprised of:

·    Cash: US$0.10 per MIL share; and  

·    MSH shares: one newly issued MSH share for 16 MIL shares (equivalent to ca. US$0.65 per MIL share based on MSH's closing share price of US$10.50 (as at 17 June 2019) or ca. US$1.25 per MIL share based on MSH's latest share issuance at US$20.00 per share).

The Board of MSH continues to believe that its indicative proposal offers a more attractive opportunity to MIL's shareholders to maintain exposure to a diversified portfolio in a growing frontier market, combined with the ability for MIL shareholders to partially realise value in their investment through divesting their shares in a larger combined listed entity.

The Board of MSH encourages MIL's shareholders to actively reach out to the Board of MIL and to encourage the Board of MIL to engage with the Board of MSH to progress discussions and execute this transaction.

For more information please visit www.ms-holdings.com or contact:

Notes to editors

Myanmar Strategic Holdings Ltd.

Myanmar Strategic Holdings Ltd. is an independent developer and manager of consumer businesses located in Myanmar, one of the fastest growing economies in the world. The Company's portfolio currently focuses on Education, Services and Hospitality with the view to expand within the broader consumer sector in Myanmar.

Education sector: the Company currently has exclusive development and franchising agreements with Wall Street English for ten English language centres across Myanmar over the course of the ten-year agreement. Two centres were opened in 2017 and a third was opened in August 2018. As of March 2019, Wall Street English Myanmar served ca. 1,400 students. Through the franchise, MSH also partnered with the Directorate of Company Administration in Myanmar to provide English language courses to its civil servants.   

The Company also operates a joint venture with Auston Institute of Management to develop and operate the Auston College Myanmar. The private school opened in May 2018 offering diplomas in Engineering Technology, Construction Project Management and Networking, Information Systems, and Security. English language learning is also provided by the Company's nearby Wall Street English centre.

The Company is also set to launch its first international school, the Yangon American International School in Yangon, in August 2019. Refurbishment of the Yangon American facilities was completed in May 2019 and enrolment of students is currently underway.

Services sector: through its acquisition of EXERA, the Company now offers security, risk management and secure logistics services, including cash-in-transit. Founded in 2013, EXERA employs approximately 1,100 guards making it one of the largest security services providers in Myanmar.

Hospitality sector: through its portfolio, the Company currently manages over 470 beds across four boutique hotels in three core tourist locations across Myanmar, operating under the award winning Ostello Bello budget hospitality brand. MSH operates an asset light strategy, entering into long-term operating and management agreements with local hotel owners.

Myanmar was one of the fastest growing economies in Asia in 2017 and 2018 (Source: Asian Development Bank). In 2019, its annual GDP growth is expected to be about 7% (Source: Asian Development Bank), making it one of the fastest growing economies in the world.  

MSH is well positioned to provide investors early exposure to Myanmar's strong economic fundamentals enhanced by ASEAN's wider growth prospects.