WASHINGTON, D.C., June 18, 1999 — The International Finance Corporation will invest US$13.2 million in one of Ecuador's leading confectionery and food companies, La Universal, S.A.
The project is IFC's first investment in an industrial manufacturing company in Ecuador since the 1970s and reflects its strategy of expanding its presence in the Andean Region and helping companies with good growth potential to modernize their operations and increase competitiveness. IFC's investment provides La Universal with new equity and long-term financing that will strengthen the company's capital and financial structure.
La Universal, with total sales of $37 million in 1998, produces chocolate, candy, pasta, consumer cocoa, and semi-finished cocoa products. The project, expected to be completed by March 2000, will upgrade La Universal's plant, remove production bottlenecks, increase capacity, and restructure existing short-term debt.
IFC's financing consists of a loan for its own account of up to $8.2 million, and an equity investment of up to $5 million. IFC will co-finance this transaction with the Commonwealth Development Corporation of the U.K. which will make an equity investment of $10 million.
La Universal was founded in 1889 in Guayaquil, Ecuador. In 1992, Mr. Domingo Norero, whose family was one of the original founders of La Universal, acquired majority control of the company. La Universal expects to double its sales within five years and increase its presence in the Andean Region food industry through exports and strategic partnerships.
IFC Vice President Mr. Assaad Jabre, who signed the agreement on June 17, said that IFC's investment bridges a critical period of transition for La Universal and mobilizes financing for this competitive, family-owned company which seeks to modernize its operations and develop a greater presence abroad.
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.
