A Chinese fiber-optic network company is planning a U.S. listing of the assets it holds in Myanmar and Cambodia, which could give foreign investors rare exposure to the two Southeast Asian countries, people familiar with the matter said.
HyalRoute Communication Group Ltd., a Shenzhen-headquartered telecom infrastructure company, is seeking to raise up to US$1 billion by going public in New York, the people said.
The company, which has been in operation for over a decade, provides fiber-optic networks and other infrastructure to telecommunications companies, television and Internet services providers in Myanmar and Cambodia. HyalRoute’s website says it operates under the banner of China’s Belt and Road Initiative, which has seen the Chinese government encourage companies to invest in construction and infrastructure projects in over 70 countries in regions including Europe, Asia and Africa.
The U.S. IPO plans are in early stages, and a listing may happen in late 2018 or early 2019, one of the people said.
HyalRoute declined to comment.
An offering would be a test of foreign investors’ appetite for assets in the two emerging economies, which have each been growing at more than 6% annually. Myanmar, which suffered under decades of military rule and faced economic sanctions imposed by the west, has started to see increased foreign interest since the sanctions were first eased in 2012.
U.S. companies including Colgate-Palmolive Co. , Coca-Cola Co. and Gap Inc. have restarted operations in the country and are investing millions of dollars in Myanmar. Data from the United Nations Conference on Trade and Development Myanmar shows that foreign direct investment in the country totaled $4.3 billion in 2017, compared to $946 million four years ago. Cambodia’s FDI was nearly $2.8 billion as against $1.8 billion in the same period.
According to the World Bank, Myanmar, which has a population of 53 million, is expected to see its economy grow 6.8% for the fiscal year that started in April. That makes it among the fastest growing economies in the region. Similarly, the bank estimates Cambodia to grow by 6.9% in 2018.
Since 2014—when Myanmar awarded telecom licenses to foreign operators like Norway’s Telenor and Qatar’s Ooredoo, providing these firms with optical fiber networks—it has seen increased mobile and internet penetration.
On its website, the company says its goal is to “connect backbone optical fiber infrastructure networks across major countries and regions across all continents.” Its current shareholders include a Shenzhen-listed technology group known as Kuang-Chi.