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| This Summary of Project Information 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. |
Summary of Project Information (SPI) |
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| Project number | 10179 |
| Project name | Lebanese Credit Insurance Company |
| Country | Lebanon |
| Sector | Finance & Insurance |
| Department | Global Financial Markets Group |
| Company name | Lebanese Credit Insurer S.A.L. |
| Environmental category | C |
| Date SPI disclosed | May 4, 2000 |
| Projected board date | June 5, 2000 |
| Status | Completed |
| Previous Events | Invested: December 15, 2000
Signed: November 10, 2000
Approved: June 6, 2000 |
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| Project sponsor and major shareholders of project company |
Lebanese Credit Insurance (LCI) will be marketed as a member of the Gerling-Namur Group and will benefit from a Technical Assistance Agreement with Namur Re. Namur Re is a wholly-owned subsidiary of Gerling Credit Insurance Group (GCIG), which in turn is owned by Gerling Namur a leading global credit insurance and re-insurance company. GCIG will provide, through Namur Re, the needed support in underwriting, management, information systems, product development, and strategy. Namur Re will provide at market conditions the leadership on the LCI reinsurance treaties.
The main shareholder in LCI will be Namur Re with 25%, followed by IFC with up to 20%, and by Mr. Karim Nasrallah, a Lebanese entrepreneur experienced in the insurance sector, with 10%. The remaining 45% of the capital will be held by several other shareholders, mainly leading insurance companies. |
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| Total project cost and proposed IFC investment |
| The total project cost is US$2.5 million. IFC will provide an equity investment in the amount of up to US$500,000, representing up to 20% of LCI’s initial paid-in capital of US$2.5 million equivalent in Lebanese Pounds. |
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| Location of project and description of site |
| Lebanese Credit Insurer will be headquartered in and will conduct its business in Beirut, the capital of the Lebanese Republic. The company will be conducting its business in Lebanon and is not intending to open any branches. |
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| Description of company and purpose of project |
LCI will be the first stand-alone credit insurance company in Lebanon. LCI will initially provide both short- and medium-term credit insurance, but will in the long run focus on the short-term business. The short-term business encompasses insuring individual companies' accounts receivables, mainly short-term domestic and export trade credit. The medium-term business involves the insurance of payment defaults of individual debtors benefiting from consumer credit, such as car financing facilities.
LCI has a strong development impact as it is intended to fill an important institutional gap in Lebanon’s financial sector by setting up the first specialized credit insurance company. LCI will provide Lebanese SMEs with (i) a new mechanism for managing an important asset risk and (ii) a cheaper financing alternative through insurance coverage on their trade credit. IFC had been working closely with Gerling Namur on the establishment of the first credit insurance company in Lebanon for over two years. IFC’s presence is pivotal for Gerling Namur’s participation, for attracting the local partners, and for the Government’s consent to approve the issuance of a new specialized license. IFC is playing a central role in advising the sponsors on deal structuring issues, including the drafting of a strong Joint-Venture Agreement and Operational Policy Statement. |
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| Environmental and social issues - Category C |
This is a Category C project, according to IFC’s Procedure for Environmental and Social Review of Projects, because it is likely to have minimal or no adverse environmental impacts.
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| To contact the project company, please write to: |
Mr. Karim A. Nasrallah
11 Rue Gergi Zeidan, Achrafieh, Beirut
B.P. 11 66 19, Beirut, Lebanon |
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