Washington, D.C., November 8, 2004 –
The International Finance Corporation, the private sector arm of the World Bank Group, provided $100 million in long-term financing to Aceitera General Deheza (AGD), a major agribusiness group in Argentina. This operation will support the company’s $163.7 million capital investment program over the next three years.
The Project entails the expansion of AGD’s oilseed crushing capacity and high-protein soybean meal production, as well as construction of inland storage facilities. IFC financing consists of a $50 million A-loan and $20 million C-loan for IFC’s own account, and a B-loan of $30 million. The financing to AGD marks the first long-term loan extended to an Argentine corporate since the 2001-2002 crisis and reflects Argentina’s competitiveness in agricultural production. The B-loan generated a lot of interest among international commercial banks and was syndicated via a competitive Dutch auction process.
AGD’s core business is oilseed processing, in which the company is a market leader for soybeans, sunflower seeds and groundnuts. With a total oilseed volume of over 4 million tons crushed in the 2003-2004 harvest season, the company is one of the largest processors in Argentina. It exports over 80 percent of its production, working with about 6,000 farmers and supplying Argentina and 45 other countries on five continents.
“This transaction comes at a crucial time to support one of Argentina’s main economic drivers. It also increases IFC’s continued commitment to supporting the Argentine corporate sector, where long-term funding remains scarce,” said Jean-Paul Pinard, director of IFC’s Agribusiness Department. He added that, “despite the difficult economic conditions, with the IFC B-loan umbrella and AGD’s compelling commercial story, IFC was able to elicit interest from international commercial banks to participate in a long-term loan to an Argentine company.”
Atul Mehta, director of IFC’s Latin America and Caribbean Department, noted, “IFC’s long-term loan provides AGD with funds crucial for expanding capacity at a time when access to long-term credit for Argentinean companies remains limited. We expect the investment to have a significant demonstration effect, showing that there is room for transactions with strong companies even in challenging economic environments.”
“We are glad to enjoy a further support from IFC and the participant bank. This transaction that overcomes the liquidity constraints seen in the country will allow AGD to properly finance its strategy for long-term growth, and confirm its commitment with the recovery of the national economy”, said Miguel Acevedo, Board Member of Aceitera General Deheza.
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, 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 FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
