SHANGHAI, CHINA, September 22, 1999 —
The International Finance Corporation will participate in one of the first and biggest private investments in the metallurgical sector in China, with loans of US$98.8 million to Shanghai Krupp Stainless Co., Ltd.
The project partners the largest stainless steel producer in the world, Krupp Thyssen Stainless GmbH (60 percent shareholding) with Shanghai Pudong Steel (40 percent shareholding) to build a stainless steel cold rolling mill in Shanghai. The mill will have a capacity of 72,000 tons per year and is the initial stage of a fully integrated stainless steel plant with a total investment of $1.4 billion. Krupp Thyssen Stainless GmbH will introduce state of-the-art technology. Shanghai Pudong Steel is part of Shanghai Baosteel Group, one of the leading steel producers in China.
IFC's financing for the $294.8 million project consists of loans totaling $30 million for its own account and a syndicated loan of $68.8 million for the account of participants. The project is co-financed by Kreditanstalt fur Wiederaufbau, with a loan of $78.1 million.
Mr. Javed Hamid, IFC's director for East Asia and the Pacific, said the project would reduce China's dependence on imports and support a range of key supply industries, including important foreign exchange earners such as household appliances and kitchenware. The Chinese government has been restructuring the industry and this project will complement those efforts as well as help to develop an environmentally safe, modern, and competitive stainless steel industry. He added that the successful completion of such a large syndication demonstrates that the international markets are ready to finance well structured projects in China.
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.
