Announcement of Joint Financing in Mexico on April 17, 1963

INTER-AMERICAN DEVELOPMENT BANK 808 17TH ST., N.W. WASHINGTON 25, D. C. EX. 3-4171 INTERNATIONAL FINANCE- CORPORATION 1818 HST., N.W. WASHINGTON 25, D. C. EX. 3-6360 JOINT PRESS RELEASE 0 FOR IMM EDIATE RELEASE IFC Press Release No. 63/5 SUbject: Joint financing in Mexico IDB Press Release No. NR~21/63 April 17, 1963 The International Fina.nee Corporation, an affili.a.te of the world Bank, and the Inter-American Development Bank, together with a group of private Europ~an and. United States investment institutions, today announced the financing of a $2,750,000 sodium sulphate plant in Mexico. The Inter-American Bank will make a loan equivalent to $500,000 from its ~ ordinary resources, and the IFC will invest $750,000 in the same project. Four institutions, one in the United states and three in Europe, have agreed to participate in the IFC investment to the extent of $602,000, or more than So% of' the IFC commitment. They are: Irving Intern~tional. Financing Corporation, Edge Act subsidiary of the Irv:lztg ct.ftist Company of New York; Banca Nazionale del La.voro of Rome., Italy, through its New York subsidiary The Italian Economic Corporat~on (TIEC); Handelsfina.nz A.G. of Zurich, Switzerland; and the Societe Financiere de Transports.et d'Entreprises Industrielles s.A. (Sofina.) of Brussels, Belgium •. The Bank of America N.T. & S.A., of San Francisco, is also participating in the transaction with a $500.,000 loan to finance a 10-mile railroad spur from the plant to the Mexican National Railroad line. • The borrower will be QU.imica del Rey, s .A., a subsidiary of Metalurgica Mexicana Penoles S.A. (Metmex). The latter is an important producer of lead, gold, silver and other refined metals, and zinc, lead and copper concentrates,  - 2 - • with headquarters in Monterrey., in the State of Nuevo Leon. Fifty-one per cent of the stock of Metmex is owned by Mexican investors $1ld the rest by American Metal Climax, Inc., a United States company which is a producer of non-ferrous metals. Metmex will contribute $1,000,000 in equit,y toward the financing of the project. The plant will use the brines from vast deposits in Laguna del Rey, a dry lake in the State of Coahuila. It will have an initiaJ. production capacitrgf 75,000 tons per year and. will be designed to allow for eventual expansion to 100,000 tons. The company will produce two products·-· crude salt cake and anhydrous, high purity sodium sulphate. With the latter output the company expects to supply a large part of the needs of Mexico's growing detergent industry and of the local glass industry. This will enable the country to dispense with imports which in 1961 amounted to 13,000 tons. The firm also ex- • pects to export a substantial part of its crude salt cake production. The export production will be marketed by American Metal Climax, Inc. At full capacity, the substitution of imports and expected exports would save or earn annually about $1,500,000 in foreign exchange for Mexico. The rnter-American Development Bank loan, which"represents about one-fifth of the total cost of the project, will be used exclusively to finance the process- ing plant and. auxiliary installations. Up to $170,000 of the IIlB loan will be disbursed in dollars or other currencies available to the Bank {except Mexican pesos). The remainder, equivalent to 4;125,000 pesos, will be disbursed in Mexi- can currency. The IDB loan will be granted for a term of 9 years at an interest rate of 5-3/4 per cent annually, including the l per cent commission allocated to the • Bank's Special Reserve. It will be repaid in 16 equal, semi-annual installments .. . . . . . . . . ~  . - 3 - ., beginning in 1964. Principal and interest payments will be ma.de proportionately in the currencies lent. The IFC investment will be in the form of a loan represf~nted by dollar notes repayable in 15 eLqual, semi-annual installments beginning in 1964 and ending in 1971. The IFC investment together with the equity contribution b:Y Metmex of $1,000,000 will finance local expenditures in machinery, equipment and instal.la- tions in the plant as well as. related facilities and will provide working capital to the company • • • Ir ))