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WASHINGTON, D.C., Feb. 1 -- The International Finance Corporation (IFC) has signed a US$53 million financing agreement with Lojas Americanas S.A., a retailer in Brazil. Lojas operates 97 stores in Brazil, primarily in the two most populous states, Sao Paulo and Rio de Janeiro. The stores carry a variety of products, including food, general merchandise, household goods, and health and beauty aids. Since 1994, Lojas has had a joint venture with Wal-Mart of the United States to open wholesale clubs and hypermarkets in Brazil. The company is undertaking a US$184 million, three-year investment program to improve its operations, renovate existing stores, and open new stores, mainly in medium-sized cities. Lojas plans to automate point-of-sale and back-office operations, including inventory control, sales receipts, and stocking systems, and modernize its communications system to link stores with corporate headquarters and upgrade data transmission. IFC is providing two loans totaling US$33 million for its own account and has arranged a syndicated loan of US$20 million. Four international commercial banks -- ABN AMRO Bank N.V., Deutsch-Südamerikanische Bank Aktiengesellschaft, ING Bank N.V., and Lloyds Bank Plc -- have agreed to participate in the syndication. "The government's success in stabilizing the economy has changed the retail environment significantly in Brazil," according to Mr. Helmut Paul, Director of IFC's Latin America and the Caribbean Department. "During the previous periods of high inflation, retail margins were driven by inflation gains. The present low-inflation environment makes comparison shopping possible and demands that retailers improve their productivity and reduce costs. Consumers benefit from having access to better-quality goods at lower prices," he added. IFC is a member of the World Bank Group and is the leading multilateral source of equity and loan financing for private sector projects in developing countries.
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