SARAJEVO, BOSNIA-HERZEGOVINA, March 15, 1999 —
The Executive Vice President of the International Finance Corporation, Peter Woicke, today signed a loan of US$2.67 million for the Bosnalijek pharmaceutical company as part of IFC's strategy of investing in privatizing companies in order to build the private sector of Bosnia-Herzegovina.
Bosnalijek, d.d. is the only manufacturer of over-the-counter and prescription drugs in Bosnia-Herzegovina. IFC's investment consists of a senior loan to modernize the company's facilities for production of solid oral drugs, most of which currently are imported.
Bosnalijek was established in 1951 as a state-owned enterprise and is now owned 50.03 percent by its management and employees, and 49.97 percent by the state of Bosnia-Herzegovina. Subject to privatization of the company and the consent of the General Assembly of the Shareholders, IFC's loan is convertible to equity.
Mr. Woicke praised the company for re-building into one of the most profitable companies in post-war Bosnia-Herzegovina. IFC has sought out companies like Bosnalijek that have overcome setbacks, become profitable, and have the potential to effectively compete with other regional players. Mr. Woicke added that IFC's decision to consider an equity position in the company should be a positive message to potential strategic investors about the ability of the management team and quality of operations at Bosnalijek.
The lack of investment in infrastructure and new technologies during the socialist era, a production program that was mainly focused on manufacturing under licensing agreements, and significant damages sustained during the 1992-95 war presented Bosnalijek with substantial challenges. Since 1996, the company has undertaken an aggressive program to rebuild and modernize its manufacturing facilities, while ensuring good manufacturing and laboratory practices. Today, Bosnalijek's development program includes more than 124 products, ranging from solid oral drug forms to ampoules and ointments and the company appears set to become one of the region's main producers of generic drugs.
IFC Trust Funds provided by the Swiss government financed the first audit of Bosnalijek in accordance with International Accounting/Auditing Standards.
IFC, part of the World Bank Group, fosters 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.