Project Name Pending

Summary of Proposed Investment

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only.

Project number	26937
Company name	Company Name Pending
Country	Argentina
Sector	Industrial & Consumer Products
Environmental category	B
Department	Global Manufacturing & Services
Status	Pending Approval

Date SPI disclosed	April 23, 2008
Projected board date	May 23, 2008

View Environmental & Social Review Summary (ESRS), click here

Overview

Sponsor/Cost/Location

Development Impact

Contacts

Attachments

Project description

Note on Disclosure: pursuant to paragraph 9 (d) of IFC’s Disclosure Policy, the disclosure of the project company’s name of IFC’s investment is being delayed because of risk of impacting market conditions. In a due course, a revised SPI will be published containing all standard SPI information.

Headquartered in Cordoba, Company Name Pending (the company) is one of the leading auto parts manufacturers in Argentina. The company is involved in design, manufacture and sale of automotive seats, front and door panels and other components, which it supplies to international Original Equipment Manufacturers (OEMs).

IFC is considering an investment in a holding company that intends to purchase, directly or indirectly, 100% of the company.

Anticipated development impact of the project

Development Impact:

The investment will facilitate the improvement of operational efficiencies at a leading Argentine auto parts company, allowing it to compete effectively with global players. The investment will support employment creation and contribute to the country’s export earnings. It will create value in Argentina by supporting an important supplier in the Mercosur region and enhancing the competitiveness of locally-based OEMs in growing their business both locally and internationally.

IFC Role:

IFC’s role in this transaction includes:

- support for a local company that is cost-competitive and well-positioned to serve the regional market,
- support of a mid-sized company founded by a local entrepreneur, which has grown into an important player of the domestic automotive supply chain,
- provision of global sector knowledge and experience.

IFC's expected development contribution

IFC is expected to help the company raise future debt and equity financing, both from local and international sources. IFC can also play a role in advising the company on how to best fund its future growth. With its sector expertise, IFC’s input can add value with respect to the company’s strategy formulation and market opportunities. The company believes IFC’s presence will be a positive indicator to future investors in the company.

Environmental and social issues - Category B

The project is being reviewed as a Direct Investment according to IFC’s Social and Environmental Sustainability Policy. Based on a preliminary review of project information, the following Performance Standards are expected to be applicable:

- PS1: Social and Environmental Assessment and Management Systems with respect to the company’s management of its environmental, health and safety performance; compliance with national and local permitting requirements, and compliance with IFC’s Performance Standards and guidelines.

- PS2: Labor and Working Conditions with regard to fair, safe and healthy working conditions. In this industry key issues are likely to be control of heat and noise, fire protection, and control of worker’s exposure to additive chemicals.

- PS3: Pollution Prevention and Abatement with specific focus fume control from plastic manufacturing processes, solid waste management, refrigerant use in chillers and energy efficiency, particularly use of electricity in forming machines. Other issues of potential concern include: control of spills, leaks, and fugitive emissions of chemicals when additives are applied; and management of wastewater discharges, if any, during cooling and heating, cleaning, and finishing operations.

- PS 4: Community Health, Safety and Security issues are expected to be limited to transport impacts, but will be reviewed at appraisal.

Upon completion of the appraisal review, IFC identifies any compliance gaps and design mitigating measures to be included in a Corrective Action Plan (as appropriate). Performance reporting requirements are also established. This is expected to be a category B project. An environmental due diligence was conducted by an outside consultant.

IFC PROJECTS