RNS Out20 Jun 2018 08:04
MySQUAR, the Myanmar-language social media, entertainment and payments platform whose principal activity is to design, develop and commercialise Myanmar-focused internet-based mobile applications, is pleased to announce the acquisition of the entire share capital of MyPay Myanmar Limited ("MPM") from MyPay Limited ("MyPay") (the "Acquisition").
MPM is a company incorporated in Myanmar in 2016 to establish a payments and remittance business and is in the process of applying to the Central Bank of Myanmar for a payments license.
The Acquisition will streamline the Company's development of smartphone payments systems, which are anticipated to provide substantial revenues going forward. With few bank branches, Myanmar is a largely cash-based society and the Company believes that smartphone payments will be an intrinsic part of the country's modernisation and commercialisation.
Background to the Acquisition
In October 2015 the Company entered into a services agreement ("Services Agreement") with MyPay under which:
· the Company and MyPay agreed to collaborate and integrate MyPay's services into the Company's MyCHAT product to permit MyPay to deliver its services to the Company's users and vice versa;
· MyPay would register every user of MyCHAT and the Company would register every user of MyPay;
· IP developed under the Services Agreement, if any, would remain vested in the party that developed it; and
· revenues generated by MyPay under the Services Agreement would be shared equally;
The Services Agreement has an initial term expiring on 13 December 2020. Under the Services Agreement the Company was paid integration fees of USD 750,000.
The Services Agreement was subsequently novated from MyPay to MPM.
MPM has applied to the Central Bank of Myanmar for a payments licence.
The Company expects a minimum capital requirement of not less than 6bn Myanmar Kyat (approximately USD 2.2m) to be a condition of the grant of a payments licence.
MPM incurred a loss of USD 253,421 during the 12 month period to 31 March 2017.
Reasons for the Acquisition
The Board considers that the Acquisition will bring the following benefits to the Company:
· creating the opportunity for a direct regulatory relationship between the MySQUAR group and the Central Bank of Myanmar;
· the Acquisition will terminate the effective shared ownership of users which has impeded the Company's freedom to enter into agreements with new prospective joint venture partners;
· the Acquisition will relieve the Company of the revenue sharing provisions in the remittances market; and
· in addition, the Chairman of MyPay and one of the directors of MPM, Nicolas Nyugen, is expected to join MySQUAR and be appointed Chief Financial Officer of the Group subject to the completion of appropriate regulatory diligence.
Terms of the
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