VILNIUS, LITHUANIA, January 27, 1999 --- The International Finance Corporation signed an agreement today with AB Ekranas to provide US$15 million in loans to modernize Ekranas' production facility in Panevezys, Lithuania. IFC's investment consists of a US$12.8 million senior loan and a US$2.2 million convertible loan.
Ekranas manufactures color picture tubes (CPTs) and glass components for CPTs and is the only TV tube factory of the Baltic States and the Former Soviet Union which remains in operation. Established in 1962 as a state-owned enterprise, Ekranas is now the second largest private company in Lithuania. Management and employees own 44 percent of Ekranas' shares while 48 percent of the Company is owned by foreign investors related to Profilo, a major Turkish color TV manufacturer, and Farimex S.A. of Switzerland, a large investment and distributor company in the electronics industry. The purpose of the project is to upgrade the existing CPT glass factory and the assembly line that will result in improved product quality and increased efficiency of the production process.
IFC is financing this project along with Vilniaus Bankas, the company's main Lithuanian banking partner, which will also participate in financing with a US$10 million loan. Ekranas will finance the balance of the US$39.5 million project cost from internal resources.
Mr. Eimutis Zvybas, General Director of Ekranas, Mr. Alain Clement, Business Development Director of Farimex S.A., Mr. Julius Niedvaras, Chairman of the Board of Vilniaus Bankas, and Mr. Harold Rosen, IFC Director for Central and Southern European Operations, signed the investment agreements. Mr. Rosen, who has been meeting with Lithuanian government officials and business groups during his visit, said that Ekranas is an impressive example of a company which has benefited from direct foreign investment and was able to re-orient its operations from the former Soviet markets to the international market. He stressed that the project is part of IFC's strategy to provide long-term financing for modernization of newly privatized companies in Central Europe and that the investment will support Lithuania's transition to a competitive market economy.
IFC, part of the World Bank Group, fosters growth in the developing world and in emerging economies by financing private sector investments, mobilizing capital in the international financial markets, and providing technical assistance and advice to governments and businesses.
