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Washington D.C., April 8, 2003—
The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has structured a $60 million Pre-Export Finance Seasonal facility for Argentina’s largest food-conglomerate and exporter of oilseeds and its byproducts, Molinos Río de la Plata S. A. The facility marks IFC’s second investment in Argentina since the onset of the country’s economic crisis and strengthens Molinos’ capacity to meet its soybeans and sunflower seed purchase program during the peak months of the current harvest.
The facility, co-arranged with Rabobank International, consists of an A loan for IFC’s own account of $30 million, and a syndicated B loan of $30 million evenly participated in by Rabobank International and Vereins Und Westbank A. G. Rabobank International will also serve as the facility’s Administrative Agent. The Pre-Export Facility Program will be secured by Molinos’ export contacts and renewed annually for a period of up to three years.
“As a result of the economic crisis, companies’ability to access much needed working capital and trade lines has been constrained. We are glad to assist our clients as they strive to overcome existing difficulties and contribute to Argentina’s economic recovery by supporting export-oriented industries.We are also happy to see two major commercial banks join us in these important transactions, signaling that, despite current macro-economic conditions, there is room for well-structured financial transactions,” said Jean-Paul Pinard, Director of IFC’s Agribusiness Department.
“We are extremely happy with the $60 million facility the IFC and Rabobank International structured for Molinos, given the difficult situation in Argentina and the consequent lack of domestic credit. The new facility has been arranged at a proper time as Molinos is rapidly increasing its exports - Molinos exports doubled in 2002. We believe this facility is, in a certain way, a recognition to a company which has managed to overcome the 2002 economic turmoil in Argentina and maintain a solid economic performance, in spite of its heavy exposure to the domestic market,” said Juan Manuel Forn, Chief Executive Officer of Molinos.
“This new facility confirms our strong commitment towards the food-agri sector in Argentina, and to working with companies such as Molinos Rio de la Plata. The uncertain legal and economic environment prevailing during the last year has not made it easy to continue operating in the country, but the umbrella of the IFC has proven to provide the additional comfort needed,” said Jorge Correa, General Manager of Rabobank International in Buenos Aires.
Even though IFC's existing country portfolio has been affected by the economic crisis in Argentina, IFC has been working closely with its clients to help them overcome the harsh economic conditions, as shown in its support to Aceitera General Deheza and now to Molinos.
In the fiscal year 2002, IFC committed $1.5 billion in Latin America and the Caribbean, for 47 projects amounting to $1.1 billion for its own account and $330 million in syndicated loans. This marks a 45 percent increase from last year’s commitment of $1.0 billion, reflecting IFC’s confidence in the private sector potential of the region.
IFC's mission (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. Since its founding in 1956, 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 with an additional $6.5 billion held for participants in loan syndications.
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