Washington, D.C., July 1, 2003—
The International Finance Corporation, the private sector arm of the World Bank Group, has signed an agreement to provide a medium-term standby revolving credit facility of $30 million to LanChile S.A. This is IFC's first project in this sector in Latin America. The facility will help strengthen the airline’s long term working capital position.
The global airline industry has experienced several challenges in recent years because of September 11, 2001, the economic slowdown, particularly Latin America, fluctuating oil prices and, most recently, SARS.
LanChile is one of the leading airlines in Latin America with a strong brand image and wide network. Together with its code-share partners and affiliates, it operates a fleet of 56 passenger and cargo aircraft covering a wide range of destinations both domestically and internationally. Despite unprecedented challenges in the aviation sector, the airline has continued to remain profitable in recent years.
Francisco A. Tourreilles, director of IFC's Infrastructure Department, said: "IFC is pleased to support a company that provides efficient transportation services to the Latin American region and beyond, and has a high developmental impact on a wide range of economic sectors particularly exports from Chile and other Latin American countries.”
Bernard Pasquier, director of IFC’s Latin America and Caribbean Department, noted: "IFC’s support to LanChile is a good example of what IFC stands for in the region, that is, we are committed to support the private sector even when domestic and international banks have been reluctant to increase their commitment and exposure.”
Enrique Cueto, CEO, LanChile, commented, "We are very pleased to welcome IFC’s support to LanChile and the confidence they have shown in our airline during this especially difficult time in the aviation sector.”
LanChile is the only Latin American airline listed on the New York Stock Exchange, where its American Depositary Receipts are currently traded. LanChile’s stock is also listed on the Chilean stock markets.
IFC's committed portfolio in Chile is $240 million. IFC's strategy in the country has been focused in areas where investing can make a significant developmental impact, with the objective of supporting a traditionally strong private sector which has been affected by the decline in private capital flows.
IFC's mission (www.ifc.org) is to promote sustainable private sector investment in developing countries and transition economies, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the emerging markets, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY02, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC's committed portfolio at the end of FY02 was $15.1 billion for its own account and $6.5 billion held for participants in loan syndications.
