Announcement of IFC to Invest in First Major Quartz Analog Watch Company in India March 4, 1987

Thursday, March 4, 1987 Bruce McWilliams Press Release 87/46 (202) 676-1950 IFC TO INVEST IN INDIA'S FIRST MAJOR QUARTZ ANALOG WATCH FACTORY The International Finance Corporation (IFC) will make a $14.4 million investment in the first Indian watch company to concentrate wholly on quartz analog watch manufacture. Total cost of the project is estimated at $51 million. The project, which will be undertaken by the newly formed Titan Watches Limited, will involve the construction of a plant in Hosur, Tamil Nadu, in Southern India, and the subsequent manufacture of two million quartz analog watches annually. Production is expected to begin in early 1987. Initially, production will be based on assembly of movement kits supplied by France Ebauches SA, but the company expects to begin a phased program for the in-house manufacture of movement components during 1987. Most of the specialized horological machinery and equipment will be imported from manufacturers in Switzerland and France, while certain lathes and general purpose machinery will be purchased in India. Titan Watches Limited will be owned approximately 26 percent by the Tamil Nadu Industrial Development Corporation, 24 percent by Questar Investments Limited (a Tata Company) and associates, 6 percent by France Ebauches SA, 5 percent by the Unit Trust of India, 2.5 percent by IFC, 1.5 percent by directors and others and the remaining 35 percent by the public. - MORE - -2-- The IFC investment will be made up of US$400,000 in equity and a multicurrency loan of US$14 million equivalent (SwF23.1 million) which will be denominated in European Currency Units, Swiss Francs and Yen. This is the first instance of an IFC loan being denominated in ECUs in India. IFC, which provided advice in the financing of the project, is the leading private sector agency which provides equity financing and long-term loans without government guarantees to private enterprises in developing countries. - END -