Announcement of IFC Investment in Compania Fundidora de Fierro y Acero de Monterrey, S.A. (FUNDIDORA), Mexico on August 22, 1964

.NTERNATIONAL FINANCE CORPORATION 1818 H STREET, N.W., WASHINGTON 25, D. C. TELEPHONE: EXECUTIVE3-6360 IFC Press Release No o 64/14 SUBJF.cT: IFC Investment in Compania Fundidora For Release AM Newspapers de Fierro y Acero de Monterrey, S.A. August 22, 1964 (FUNDIDORA)., Mexico The International Finance Corporation ( IFC), an a£filia te of the World Ban~, and Credito Bursatil, S.A., a subsidiary of Banco Nacional de Mexico, S0A1:, with the participation of 10 United States, Mexican and Swiss financial institutions, have formed a syndicate to underwrite an off'ering totaling Mex$156 million (approximately US$12.5 million) of capital shares of a Merlcan steel company. The und.erwri ting will assist Compania Fundidora de Fierro y Acero de • Monterrey, S.A. (FUNDIDOBA), the largest private steel company in the country, to obtain financing to carry out a new expansion program to increase steel production from 500.,000 to 750.,000 tons annually. The Export-Import Bank (Eximbank) of Washington., has anmm.nced the authorization of a loan of US$28 million for the expansion program. This is the second underwriting on behalf of FUNDIDORA in which Credi to Bursatil and IFC l':l.ave jointly engaged., and is by far the largest amount ever offered on such a wide basis to stockholders of :'ri vate companies in Me.xioo 0 '!he previous joint unctel'i-Il'i ting was in 1962., Kuhn, Loeb & Co., Incorporated, Handelsfinanz A.G. of Zurich, and Morgan Guaranty International Finance Corporation are taking substantial participations in IFC's commitment. • Seven Mexican financial i~ti tations are participating in Credito Bursati.l's commitment. They are:  • - 2 - Banco Nacional de l Iexico, S.A. 1 Banco de Comercio, S.A. Banco Comercial Mexicano, S.A. Banco de Lorrlres y Mexico, S.A. Banco Aboun,.rad, S.A. Banco de Industria y Comercio, S.A. Casasus Trigueros y Cia., S.A. The syndicate ts underwriting agreement was announced following an extra- ordinary Ir.ieeting of shareholders of FUNDIDORA in Mexico City today at which the shareholders approved an increase in the company's capital from Me.x$325 million to Me:x:$450 milliono The new issue will be offered to current shareholder~ on a basis of one share for each 2.6 now held. The rights offering will commence August 22 and will terminate on September 12., 1964, and the subscription price to shareholders will be Mex$12.5 per share~ IFC and Credito Bursatil agreed to share equally in a firm unde.rwri ting • of the new issue. Any part of the offering not subscribed by shareholderD ·will be taken up by the underwriters and offered to new shareholders, both inside and outside Mexico, and thus broaden FUNDIDORA•s ownership. The offering has not been registered urder the Securities Act of 1933 and the shares are there- fore not being offered in the United States. In addition to the syndicate underwriting, IFC, as a shareholder of the company, has also the right to subscribe to 34.,615 shares of FUIIDIDORA equivalent to about US$346 1 15o. IFC•s gross commitment comes to appro.ximately US$6.3 mil- lion, the largest which IFC has ever made. •