(EnergyAsia, August 3 2012, Friday) — Singapore listed linen and apparel company Aussino Group Ltd is morphing into a retail fuels operator with its proposed S$70 million takeover of Max Myanmar Group’s energy business unit which owns and operates a downstream business in Myanmar. (US$1=S$1.25).

Aussino began its transition early last month when it signed a non-binding memorandum of understanding for a reverse takeover deal by Max Myanmar, and appointed PrimePartners Corporate Finance Pte Ltd to provide financial advice.

Aussino said it will acquire Max Strategic Investments Pte Ltd which currently owns and operates Max Myanmar’s chain of 21 fuel kiosks in key cities including Mandalay, Naypyitaw, Bago, Ayeyarwady and Yangon. The company plans to expand the chain and build up its energy business in the resource-rich country which is emerging from decades of political and economic isolation.For the financial year ended March 31 2012, Max Strategic recorded an unaudited pro-forma consolidated revenue of approximately S$93.2 million and a consolidated after-tax net profit of approximately S$5.2 million.

Anthony Lim, Aussino’s chairman and CEO, said:

“Upon completion of this strategic acquisition, Aussino will be transformed into an established downstream operator in Myanmar’s budding oil and gas energy sector with a strong retail following and portfolio of established local and international corporate clients.

“We believe that this earnings accretive acquisition will drive value for our shareholders given its robust operating fundamentals and strong cash flows, and will serve as a platform for the group to participate in the growth of Myanmar’s emerging economy and fuel demand.”

If the proposed reverse takeover is completed, Max Myanmar, controlled by businessman U Zaw Zaw, who is on a US sanctions list, will effectively operate Aussino.

Mr Zaw has been blacklisted by the US government for his close ties to former Myanmar military leader Than Shwe who has been cited for human rights abuses.Myanmar, the second largest country in Southeast Asia after Indonesia, borders China, India, Bangladesh, Laos and Thailand, and is well-endowed with rich natural resources such as arable land, forestry, minerals, natural gas, freshwater, marine resources and is a leading source of gems and jade.

With the election of its first civilian president, U Thein Sein, in March 2011, Myanmar has introduced political and currency reforms to liberalise trade and foreign direct investment regulations and enhance the business investment environment.

Encouraged by these reforms, the governments within the European Union as well as the US and Australia are removing their sanctions against the country and looking to help develop its vast resources sector and youthful workforce.

According to Aussino, Myanmar attracted foreign investment worth US$20 billion in FY2011, far exceeding the total of US$16 billion it took in over the previous two decades. The International Monetary Fund has projected its economy to grow by an annual rate of around 6% over the next years.