Washington, D.C., April 27, 2001
The International Finance Corporation has signed an agreement to lend US$80 million to Arçelik A.
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., a leading Turkish manufacturer of household appliances. The IFC loan is intended to support the continued long-term growth and strategic development of the company.
Khosrow Zamani, Director of IFC’s Southern Europe and Central Asia Department, said that it is critical for international financial institutions to continue to support viable private sector enterprises in Turkey at a time when capital inflows to the country have been greatly reduced, and the local banking sector embarks on a process of reform. In the midst of anticipated economic contraction and increased unemployment resulting from structural reforms, Arçelik’s role as a stable employer and provider of indirect labor opportunities at the small and medium-sized enterprise level becomes increasingly important, he added.
The loan package will provide funding for key corporate-wide initiatives including the modernization of plants, new product development, and information systems renewal. The company, a member of the Turkish Koç Group, has demonstrated a strong commitment to continuous reinvestment and product technology leadership by investing over $300 million in the last five years for capacity expansion, R&D, and modernization.
In addition, the funding will support diversification of the company through exports and potential acquisitions overseas. Such investments are critical in light of competition and cyclical aspects of the industry, as well as long-term growth opportunities in Turkey and the surrounding regions. The company’s activities will support foreign currency earnings, while reinforcing a positive image for quality-based Turkish exports.
IFC will provide a loan for its own account of up to $30 million and total syndicated loans of at least $50 million for the account of participant banks. IFC, together with ABN AMRO Bank N.V., are Joint Arrangers of the syndicated loans for the project, with Citibank N.A. and Crédit Lyonnais S.A. serving as Co-arrangers. IFC’s involvement has proven instrumental in mobilizing long-term financing from the international banking community in the midst of Turkey’s ongoing economic crisis.
The mission of IFC, part of the World Bank Group, is to promote sustainable private sector investment in developing countries as a way to reduce poverty and improve people’s lives. IFC finances private sector investments in emerging markets, mobilizes capital in the international financial markets and provides technical assistance and advice to governments and businesses.
