PACKAGED DEALS
Washington, D.C., March 6, 2000 –
Following is a package of brief announcements about IFC transactions signed
in the past month for investments that will support private sector enterprises
in the developing world. This is the second edition of a new monthly digest
of the IFC deals that have not been announced in our regular press releases.
More information is available by contacting the Media Relations team listed
at the end.
The mission of IFC, part of the World Bank Group, is to promote private
sector investment in developing countries, which will reduce poverty and
improve people's lives. IFC finances private sector investments in the
developing world, mobilizes capital in the international financial markets,
and provides technical assistance and advice to governments and businesses.
MEXICO: FIRST INVESTMENT IN MUTUAL FUND MANAGEMENT COMPANY
IFC will make its first investment in a Latin American mutual fund management
company, with equity of US$1 million in Invercap, S.A., a young firm that
manages seven separate mutual funds targeted to individuals and corporations
in Mexico.
Since regulatory reform in Mexico in 1993, independent mutual fund management
companies have been growing rapidly but still represent only a small share
of the mutual fund industry. IFC's support for a well-managed independent
firm will foster competition in a concentrated industry that is dominated
by large financial groups. Invercap, which was founded in 1997, will use
the investment to support its next phase of growth and bolster marketing
efforts.
The project will help mobilize household savings in Mexico, giving individual
investors better access to capital markets, said Karl Voltaire, IFC Director
of Latin America and the Caribbean, noting that mutual funds are an effective
way for small savers to invest in diversified financial instruments through
professionally managed vehicles.
PERU: SUGAR INDUSTRY
IFC is providing $15 million in loans to Empresa Agroindustrial Laredo,
S.A.A., a Peruvian sugar producer, to finance the modernization of sugar
mills and expansion of sugar cane fields.
The company will replant up to 2,900 hectares of sugar cane fields and
expand sugar mill operations to reach processing capacity of 3,000 tons
of sugar cane per day. Manuelita, the project sponsor and second largest
sugar producer in Colombia, will contribute by transferring technology
to improve the operational efficiency of Laredo. As part of the project,
IFC also helped the company to mobilize necessary long-term funding through
the support of FMO, the Dutch development agency. The investment, IFC's
second in the Peruvian sugar industry, will bolster private sector involvement
in the sugar industry.
PANAMA: FINANCIAL SECTOR
IFC is providing a $58 million long-term corporate loan package to a Panamanian
bank, Banco del Istmo S.A. The investment includes a $20 million loan for
its own account.
IFC also arranged a successful syndication, which was oversubscribed by
$8 million, bringing the total of B loans to $38 million for the account
of participant banks. Banco del Istmo operates 33 branches in Panama and
offers commercial credit, cash and asset management, payroll services,
employee loan programs and corporate finance services.
LITHUANIA: FORESTRY INDUSTRY
IFC will invest $1.25 million for modernization of AB Klaipedos Mediena,
Lithuania's only manufacturer of plywood and one of two producers of particleboard
in Lithuania. IFC's investment consists of a $1.25 million senior loan
and a $1.5 million convertible loan. The project also received support
from the Finnish government.
Mediena, which was established in 1898 and privatized in 1992, will use
the investment to raise quality and efficiency by upgrading the particleboard
and plywood production facilities.
Mr. Jyrki Koskelo, IFC Chief Investment Officer for the project, called
Mediena an impressive example of a local company that has successfully
adapted to new competitive forces and re-oriented its operations from the
former Soviet markets to the international market. The project is part
of IFC's strategy to provide long-term financing to modernize newly privatized
companies in Central Europe. The investment will bring value-added production
to Lithuania's forestry industry, a sector which is expected to attract
significant foreign direct investment in the coming years, he said.
BOSNIA: NEW BALKAN ENTERPRISE FACILITY
IFC has signed an agreement of formal accreditation with the Government
of Bosnia and Herzegovina that includes an important new facility to nurture
the private sector in the Balkans region. The Balkans Enterprise
Facility was established by The World Bank Group and international donors
to operate in Albania, Bosnia and Herzegovina, FYR Macedonia, as well as
Kosovo. It will be headquartered in Sarajevo, alongside the IFC country
office for Bosnia and Herzegovina.
Mr. Harold Rosen, Director of the World Bank Group's Small and Medium
Enterprise Department, said the facility will support private sector development
in the Balkans by improving access to finance, development of technical
and managerial skills, improving access to information and knowledge, developing
Internet and e-commerce initiatives, and supporting privatization and corporate
governance activities. The Small and Medium Enterprise Department will
manage the facility, the newest of six such initiatives worldwide.
For more information on any of these transactions, please contact one of
the following people:
Ludwina Joseph, (202) 473-7700, ljoseph@ifc.org
AFRICA & ASIA
Jannette Esguerra, (202) 458-5204, jesguerra@ifc.org
MIDDLE EAST & LATIN AMERICA
Brigid Janssen, (202) 458-4698, bjanssen@ifc.org
EUROPE
Lana Moriarty, (202) 473-6005, lmoriarty@ifc.org
GENERAL PRESS INFO
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