Announcement of IFC Additional Investment in Kilombero Sugar Company Limited in Tanganyika on April 7, 1964

IFC Press Release No. 64/8 Subject: IFC additional investment in April 7, 1.)64 Kilombero Sugar Company Ltd. in Tanganyika The International Finance Corporation, together with the Commonwealth Develop- ment Corporation (CIC) and the Netherlands Overseas Finance Company {NOFC), have agreed to add up to bl..5 million ($4.2 million) to their existing investments in the Kilombero Sugar Company Ltd. ( KSC) to help expand the company's sugar milling and refining capa~ity and provide additional working capital. IFC, CDC and NOFC will lend to KBC, up to ~690,000, b565,000 and b245,000, respectively, • for which they will receive 7% sterling secured bonds, maturing between 1967 and 1974. KSC will increase its milling and refining capacity to rea~h an annual pro- ii duction of 31,500 long tons of sugar, as against a previously budgeted production of' 21,500 tons. It is expected that the expanded facilities of the mill and the increased acreage of sugar planting will be ready in time to achieve an output of 31,500 long tons in the 1966/67 season. The Government of Tanganyika has welcomed the additional investment and has cooperated fully With the investors and thus helped make it possible for them to -put up the additional funds. Tb.e supplemental investments will increase the company's financial resources without at the same time placing an additional call on the company's income. ..l\s part of a new financial plan, the existing 7% and 8% secured bonds, amounting to • 'til,275,000 or equivalent will be exchanged for equivalent face amounts of income  • - 2 - notes; and existing income notes, amounting to ~6oo,ooo, together with all preference shares not held by the public, and amounting to approximately :i;.660,ooo, will be converted into ordinary shares. On completion of the financial plan, the company will have outstanding secured bonds of up to ~1,500,000; income notes of 11,275,000 or equivalent; 7% cumulative preference shares of about ~37,000; and ordinary shares amounting to about h2,050,000. Under the new financial arrangements, the cash investment of CDC will total the equivalent of about $5.4 million and the total of NOFC the equiva- lent of about $2.0 million. If the supplemental commitment is fully used, IFC will have invested in KSC the equivalerrt of $4,732,000 as follows: $1,932,000 in 7% sterling bonds; $1,400,000 in dollar • income notes; $700,000 in sterling income notes; and $700,000 in ordinary shares. In addition, IFC holds 75,000 shares having a par value of $210,000 equiva- lent of common shares which were received as a com- mission on the original investment. • r