Announcement of IFC Support of Important Automotive Parts Projects in Mexico September 15, 1987

September 15, 1987 M ' onique Amaudry FOR IMMEDIATE RELEASE 202/676-9331 Press Release No. 88/11 IFC SUPPORTS AN IMPORTANT AUTOMOTIVE PARTS PROJECTS IN MEXICO The International Finance Corporation is providing a US$9 million loan to help finance a US$27.5 million project for the expansion and modernization of an existing foundry and cast iron piston ring plant, and the construction of a new plant for alloy, coated and stainless steel piston rings. The project, Sealed Power de Mexico (the existing plant) and Spimex, (the new plant), is sponsored by Grupo Condumex, a major Mexican industrial group, (60%) and Sealed Power Corporation, the project's technical and foreign marketing partner, (40%). Sealed Power Corporation is the U.S.'s largest producer of piston rings. Management for the new facility will be provided by a team of experienced professionals from the auto part sector of Grupo Condumex. The project will increase capacity from 40 million to 69 million piston rings p.a. and introduce new manufacturing and product technologies necessary to broaden the product range and substantially increase export sales. It will strengthen the Mexican companies by introducing new technologies, improving quality controls, broadening the product range and expanding capacity. Project completion is scheduled for 1988. Banamex, a local bank, is providing an US$8.1 million equivalent loan for the project and Promotora de Industrias Mecanicas, S.A. de C.V. who owns Sealed Power de Mexico and Spimex, is making a US$2.2 million equity investment. Internal cash generation will complete the financial plan. - MORE - -2- IFC has assisted the sponsors in their efforts to reduce project costs and contributed to the sponsors' willingness to move forward. The Corporation's financing was needed to complete the financial plan on appropriate terms, given the acute scarcity of long-term funds in Mexico. IFC has been investing in Mexico since 1958 and thus far in calendar year 1987 the Corporation's Board has approved 5 investments in Mexico representing new IFC commitments of more than US$100 million. These projects involve construction materials, food and food processing, fertilizer, and automotive parts. - END -