Rare IPO Bets on End of War and Economic Crisis in Myanmar

Detailed summary

A Myanmar company is going public in the middle of a civil war and economic downturn, betting on an eventual recovery.

(Bloomberg) -- A Myanmar company is going public in the middle of a civil war and economic downturn, betting on an eventual recovery.

Concordia Pcl expects to raise about $200,000 in an initial public offering that will pave the way for Myanmar’s first main-board stock listing in more than three years. That compares with about $1.2 million raised in the bourse’s first IPO in 2018.

Its chairman, Than Win, said the listing is intended to prepare the family-owned business for longer-term growth rather than fund a major expansion now.

The medical and engineering equipment distributor wants to transform itself into a professionally run company, positioning it to attract foreign investment and expand when Myanmar’s political and economic conditions stabilize.

“We are not listing for short-term sentiment,” Than Win said in an interview at his office in Yangon. “We are building an enterprise designed to thrive over the next 10 to 20 years.”

It’s an unusual strategy in a country where businesses have grappled with conflict, economic disruption and international isolation since the military seized power in 2021. The United Nations has documented widespread human rights abuses in Myanmar, which is subject to various international sanctions putting it off limits to many investors.

Concordia says import restrictions have become so cumbersome that some machinery has taken more than a year to arrive, forcing it to plan purchases of key equipment at least a year in advance. The company, which has largely funded its operations through its own cash flow with minimal debt, sees local manufacturing as one way around those constraints.

Eventually, it wants to use foreign capital and technology to locally manufacture some products it now imports. One opportunity is making consumables used in kidney dialysis, Than Win said, because importing heavy liquids carries high freight and customs costs.

Concordia is expected to begin trading in late December or early January on the Yangon Stock Exchange…

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