Myanmar Strategic Holdings to raise funds from Verlinvest, buy Vietnam-based ELT unit

wse vietnam

Photo from Wall Street English Vietnam.

Myanmar-based investment firm Myanmar Strategic Holdings (MSH) will be raising $6 million from Belgian PE firm Verlinvest SA and MSH’s largest shareholder, MACAN Pte Ltd, and will use the proceeds to acquire language training service brand Wall Street English franchise in Vietnam in a separate transaction.

MSH said in a statement that it will issue 200,000 new ordinary shares to A-Star Education Holdings, a subsidiary of Verlinvest, and 100,000 shares to MACAN, at the agreed price of $20 per share. The share subscription is expected to complete by July 2020 in two tranches.

This is part of MSH’s share issuance programme of up to 490,000 new shares within the next 12 months. Following the completion of the subscription, MACAN will hold 34.6 per cent of MSH’s issued share capital, and A-Star will own another 7.2 per cent.

MSH said the share issuance plan will provide funding to sustain the operations of Wall Street English in Vietnam, as well as expand the group’s existing operations and improve the liquidity of its shares in the market.

Verlinvest CEO Roberto Italia said his firm joined MSH as a strategic long-term investor due to the common interest in impact investing and emerging markets.

“This is a further step forward in growing our presence in Asia through our existing investment platform in India, Indonesia and Vietnam,” he said.

Wall Street English Vietnam changes hands

In a separate transaction, MSH’s wholly-owned subsidiary, MS English 2 Pte Ltd, has reached an agreement with Verlinvest for the acquisition of Wall Street English Vietnam.

MSH itself is managing the Myanmar business of the English language training (ELT) operator.

Alain Thibault, COO of MSH and CEO of Wall Street English Myanmar, will be appointed as CEO of the Vietnam-based unit.

Wall Street English Vietnam, which recorded enrollments of over 6,000 students at seven centres in southern Vietnam by the end of April, will continue to operate under the 10-year Centre Franchise Agreements with Wall Street English International on terms similar to those in place for Wall Street English Myanmar, MSH said.

The acquisition will be carried out for a nominal consideration payable in cash plus the assumption of certain liabilities, including a commitment to service the existing WSE Vietnam students, it added.

Wall Street English Vietnam generated unaudited revenues of around $13.8 million and incurred a net loss of $1.4 million in the 12-month period ended 30 April 2020, according to MSH.

“Vietnam and Myanmar share strong strategic ties and have both demonstrated leadership throughout the COVID-19 pandemic. We are confident that both economies will re-open to trade quickly and remain among the fastest-growing economies in the world,” commented Enrico Cesenni, CEO of MSH.

Wall Street English Vietnam is understood to be the first investment outside of Myanmar by MSH.

Meanwhile, A-Star Education, the operator of Wall Street English Vietnam, has another asset in this country, the European International School of Ho Chi Minh City. Verlinvest, an early backer in Southeast Asia’s e-commerce major Lazada, has recently been betting on the south and southeast Asia market with a spate of investments such as coffee chain Kopi Kenangan in Indonesia and XSEED Education, BYJU’s, Epigamia and Veeba Foods in India.

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