IFC SIGNS DM90 LOAN WITH CZECH BREWERY COMPANY
Vikas Thapar
Phone: (42-2) 24 401 402
Amy Conran
Phone: (1-202) 473-9119
Fax: (1-202) 676-0365
PILSEN, CZECH REPUBLIC, Sep. 25 -- The
International Finance Corporation (IFC) today signed a DM90 million (US$64
million equivalent) loan agreement with Plzensky Prazdroj, a.s., the leading
brewery of the Czech Republic which produces Pilsner Urquell beer.
IFC's loan, together with long-term Czech crown financing of 1.4 billion
provided by a consortium of local banks, will assist Plzensky Prazdroj
modernize and expand its main breweries, Prazdroj and Gambrinus; strengthen
the company's national distribution system; and restructure part of its
short-term debt. Upon completion of the company's investment program, Plzensky
Prazdroj is expected to have efficient, state-of-the-art production facilities
in Pilsen and a strong financial position.
"Successful macro-economic reforms together with widespread privatization
in the Czech Republic have spurred an unprecedented level of private sector
growth, creating an increasingly competitive market environment,"
said Mr. Wilfried Kaffenberger, IFC's Vice President for Operations. "Many
recently privatized Czech companies, however, need long-term financing
to modernize, expand, and strengthen their balance sheets in order to compete
more effectively in domestic and export markets. We hope that the IFC investment
in Plzensky Prazdroj will set an example and encourage an increased flow
of international long-term financing to Czech companies."
This is IFC's first investment in a wholly owned Czech company and is the
natural progression of the Corporation's pioneering work in privatization
in the Czech Republic which began in 1990. IFC's current strategy in the
Czech Republic is mainly to assist locally owned companies which are fundamentally
sound yet still in need of long-term resources for modernization and restructuring.
The financing package signed today comprises a loan of DM45 million (approximately
US$32 million equivalent) for IFC's account, a syndicated loan of DM30
million (approximately US$21 million equivalent) for the account of participating
banks, and a loan for IFC's account of DM15 million (approximately US$11
million) convertible into shares of Plzensky Prazdroj. Participating banks
include, Bayerische Vereinsbank, Creditanstalt, and Deutsche Bank.
IFC is a member of the World Bank Group and is the largest multilateral
source of equity and loan financing for private sector companies in developing
countries.
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