Telenor, the Norwegian telecommunications operator, is planning to sell its 51 percent stake in Wave Money, one of Myanmar’s biggest mobile payment services, to a conglomerate led by Singapore-listed Yoma Strategic Holdings, its main partner in Wave.
Nikkei Asia reports that, at $53 million in cash values, the sale of the stake in Wave Money is the biggest fintech deal in Myanmar since the military takeover of that country.
The takeover that occurred last February, resulting in more than 1,390 causalities and 11,300 arrested, won’t help YSH make the most of its acquisition for the fact that it caused a major blow to consumer and investor confidence.
It is worth mentioning that Wave Money helps local remittances, bill payments and over-the-counter transaction services through its Wave Pay service. The company handles one million to 1.2 million transactions per month in the region, however, the military takeover slashed its estimated two million-plus active app users.
“Wave is a great business and Yoma needed to buy it from Telenor. They had little choice if they didn’t want to see the stake go to another party — but it also fits with the growing digitalization of the financial system and their efforts to develop Yoma Bank’s retail platform,” said an investor with knowledge of the negotiations.
In addition, Myanmar’s biggest mobile payment services’ executives recognized concerns among anti-regime activists about growing enquiry by the military regime of banking and financial transactions, including demands to freeze user accounts suspected of links to the civil disobedience movement.
It argued that money flowing through mobile payments is harder to track given the small size of individual transactions, which are limited to the equivalent of $50, and the use of multiple SIM cards.
Telecom executives familiar with the deal said “The valuation of Wave Money at $104 million was “rather high” compared to Telenor’s asking price of just $105 million for its mainstream telecoms business, Telenor Myanmar, which was valued at more than $780 million when the parent company wrote off its assets last May. But Wave is ultimately a “good deal,” said one investor with knowledge of the negotiations.”