WASHINGTON, D.C., February 5, 1999 --- The International Finance Corporation today signed an agreement to invest US$20 million in Fras-Le S.A., a Brazilian manufacturer of automotive materials.
The financing package, consisting of a $10 million loan and an additional $10 million in equity, will be used to modernize and expand Fras-Le's operation as well as to retire high-cost local debt.
Fras-Le, based in Caxias do Sul in the state of Rio Grande do Sul, is Brazil's leading manufacturer of friction materials for heavy vehicles and automobiles. The company is controlled by the Randon Group, a medium-size entity with other automotive interests, including manufacturing truck trailers and semi-trailers. Fras-Le is listed on the Bovespa and its shareholders include Brazilian institutional investors such as Previ and Petros.
The investment reflects IFC's continuing confidence in Brazil's private sector, said Bernard Pasquier, Senior Manager of IFC's Latin America and Caribbean Department who signed the agreement for IFC. Fras-Le is a relatively small company with high-growth potential. It is characteristic of the type of investment that IFC has been targeting in Brazil in recent years. Mr. João Dal Bello, Fras-Le's Finance Director, signed on behalf of the company.
IFC, part of the World Bank Group, fosters economic growth in the developing world by financing private sector investments, mobilizing capital in the international financial markets, and providing technical assistance and advice to governments and businesses.