Washington D.C., May 18, 2004 —
The International Finance Corporation, the private sector arm of the World Bank Group, and Citigroup Inc. have arranged a $175 million financing package to support the corporate restructuring and global debt refinancing of Copamex S.A. de C.V., a leading manufacturer and distributor of paper-based consumer, packaging, printing, and writing products in Mexico and Central America. The financing package includes loans of $75 million for IFC’s own account and a $100 million equivalent multicurrency syndicated facility.
IFC has provided an eight-year, $50 million senior loan to Copamex’s subsidiary, Copamex Productos al Consumidor, S.A. de C.V. (CPG), which is a 50-50 joint venture with Swedish-based SCA Hygiene Products AB, a leading European manufacturer of paper-based consumer products. IFC has also invested an eight-year, $25 million subordinated convertible loan in Copamex.
The six-year, $100 million syndicated facility, which has also been provided to CPG, consists of a $46 million loan for the account of foreign commercial banks participating in IFC’s B-loan program and a $54 million equivalent Mexican peso parallel loan for the account of local commercial banks. The syndicated facility was oversubscribed in the market by $35.5 million
.
IFC also provided Copamex with currency swaps to hedge the dollar loans back into pesos.
“The long-term local currency loans provided by the financing package, as well as the corporate restructuring that expands the partnership with SCA, will help Copamex put itself on a sustainable path to achieving its potential for growth. We are pleased to be part of this process. IFC will also continue to assist Copamex in its efforts to improve sustainability in its environmental, social, and governance practices,” said Bernard Pasquier, IFC’s director for Latin America and the Caribbean.
“This transaction represented an important part of our debt reduction and overall refinancing plan, which has been successfully completed. We are very pleased with the results of the syndication process and results of the overall refinancing plan,” said Sergio de la Garza, corporate director of Copamex.
He added that the plan entailed a series of transactions: a financing package from the IFC, the syndicated loan arranged by IFC and Citigroup, the sale of 50 percent of the company’s consumer products business, the release of guarantees provided by subsidiaries of Copamex to holders of outstanding long-term local bonds, and the previously announced sale of the company’s multiwall sack business. The plan allowed Copamex to redeem its 11.375 percent senior notes due 2004 and to refinance the rest of its outstanding debt with maturities of up to eight years, and with peso-denominated and peso-equivalent funding to mitigate exchange rate risk.
Rabobank and HSH Nordbank joined the IFC B-loan as coarrangers; International Finance Participation Trust and Norddeutsche Landesbank as lead managers; and State Bank of India as participant.
Banco Nacional de México, S.A., a subsidiary of Grupo Financiero Banamex, a unit of Citigroup, acted as administrative agent for the Mexican peso parallel loan. Other institutions joining the parallel loan include BBVA Bancomer as a coarranger; Banorte and Scotiabank Inverlat as lead managers; and Comerica Bank Mexico as participant.
“We are pleased that the refinancing of Copamex’s debt has been successfully concluded. This was a complex deal that involved a series of interdependent refinancing efforts and the sale of important company assets, and it required very close coordination of the various teams involved. The company’s management did an excellent job of coordinating all parts of this landmark transaction,” said Mario Espinosa, Citigroup´s managing director of global loans for Latin America.
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Copamex is one of Mexico’s leading producers of paper-based consumer products and value-added industrial paper products, including packaging and printing and writing products. It has transformed itself from a producer primarily of industrial paper products into one of the premier producers of paper-based consumer products and value-added industrial paper products. Copamex has a leading portfolio of consumer brands of tissue and personal products, including Regio, Scottis, Lovly, Flen, Boreal, Saba, and Tena. The company’s strategy is to focus on consumer and value-added packaging products and to grow the business through effective marketing and development of innovative new products.
Citigroup, the preeminent global financial services company with some 200 million customer accounts in more than 100 countries, provides consumers, corporations, governments, and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, insurance, securities brokerage, and asset management. Major brand names under Citigroup's trademark red umbrella include Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and Travelers Life and Annuity.
Grupo Financiero Banamex is part of Citigroup. Through its banking subsidiary Banamex and its brokerage house, Accival, Grupo Financiero Banamex offers a broad range of financial services including corporate and investment banking, retail banking, insurance, pension fund management, and brokerage services, among others.
IFC's committed financing in Latin America and the Caribbean amounted to $2.18 billion in fiscal 2003 for 54 projects over 16 countries, its highest level of investment in any 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 through the close of the last fiscal year on June 30, 2003, IFC committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's worldwide committed portfolio at the end of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications.
