Dec. 03–SEOUL (The Korea Herald/ANN) — A Korean consortium led by Daewoo International will launch a project to develop luxury hotel infrastructure in Yangon, Myanmar, the company said Monday.
The POSCO trading arm and three other Korean companies are to build a 14-floor luxury hotel and a 29-floor serviced residence building on a 2,183-square-metre site near Inya Lake, one of the most popular recreational areas in Yangon.
“The $220 million project will kick off soon as three other companies have reached an agreement for their roles in the project and scale of investment,” a company official said.
The three other players to join the project are POSCO Engineering & Construction, Lotte Hotel and KDB Daewoo Securities.
Under the agreement, Daewoo International will take a project manger role while POSCO E&C will lead construction. Lotte Hotel will operate the properties after construction is completed. KDB Daewoo Securities will take a leading role in funding the project.
To finance the project, the four companies will raise $50 million by making an equity investment. KDB Daewoo Securities will take the largest share in the project, securing a 39 per cent stake. Daewoo International, POSCO E&C and Lotte Hotel will follow with shareholdings of 30 per cent, 21 per cent and 10 per cent, respectively.
KDB Daewoo Securities said it will inject an additional $170 billion through project financing.
According to Daewoo International, the two properties are expected to open in 2016.
The property development project is under a build-operate-transfer contract with the Myanmar government. The Korean consortium will run the two properties for 70 years and then transfer them to the government, which is currently renting out the land to the Korean consortium for free.
