Announcement of IFC to Invest in New Automobile Ancillary Plant in India June 15, 1988

otl/ Orporation A2043 A June 15, 1988 CONTACT:Monique Amaudry Press release no. 88/51 (202) 473 93 31 IFC INVESTS IN NEW AUTOMOBILE ANCILLARY PLANT IN INDIA The International Finance Corporation (IFC) is providing a $1.15 million equivalent equity investment to help sett up Invel Transmissions Limited, a new company that will produce sophisticated engineering products for the automoblle industry. IFC, an affiliate of the World Bank, is the largest source of direct project financing for private investment in developing coutncis. Located at Faridabad, near New Delhi, the Company's new plant will produce 144,000 sets of constant-velocity joints a year, for use in modern front-wheel drive automobiles. Uni-Cardan A.G. of the Federal Republic of Germany will provide both the technical know how and tlhe des*igns for the plant and management. IFC has bon invited to nominate a director for the $14.2 million project, which is expected to be completed by 1989. In addition to IFC's investment (representing 20 percent of the company's share capital), equity financing for the project will be provided by Uni-Cardan, through its wholly owned subsidiary (h0 percent), and through a public issue of the company's shares. The company's shares will be listed and traded on the Indian Stock Exchange. Indian financial institutions and commercial banks will provide local currency loans of Rs 66 million ($5.8 million equivalent) and -- 2 - foreign exchange funds of $2.44 million equivalent in a basket of currencies to meet the foreign exchange requirements of the project. In addition, UniCardan, through its subsidiary, will provide Rs 12 million ($0.92 million equivalent) in the form of an unsecured interest free loan. The project is part of a major investment program, undertaken by Indian automobile manufacturers and supported by the Government of India, to produce modern fuel-efficient vehicles while maximizing the use of local components. 0-