Announcement of IFC Investment in Pearl Textile Mills, Limited, Ceylon on May 12, 1970

FOR IMMEDIATE RELEASE· .NTERNATIONAL FINANCE CORPORATION 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IFC News Release No. 70/11 Subject: IFC Investment in Pearl Textile May 12, 1970 Mills, Limited, Ceylon INTERNATIONAL FINANCE CORPORATION INVESTS IN TEXTILE MILL IN CEYLON Joining Ceylor,ese and Japanese investors, the Intemational Finance Corporation, of the World Bank Group, and the Private Investment Company for Asia (PICA) are helping to finance a new $13.8 million integrated textile mill to be located near Colombo, Ceylon. The sponsor and majority shareholder is Mr. A.Y.S. Gnanam, a prominent Ceylonese industrialist. Approximately 16 per cent of\ the share capital will be provided by a 1, • public offering to Ceylonese investors. Ceyton 's two leadit1g financial institutious -- The Development Finance Company of Ceylon (DFCC) and the Bank of Ceylon -- are providing major financial support to the project. Pearl Textile Mills, Limited, will be one of the largest textile mills in the country, with an annual capacity of approximately 13.4 million yards of cotton and polyester-cotton fabrics. Besides adding to Ceylon's industrial capacity, the new mill is expected to generate net foreign exchange savings of over $1 million a year, as textile demand in Ceylon currently exceeds domestic supply, and is expected to do so for the next several years. It will provide employment to some 1,700 people. Technical assistance to Pearl Textiles will be provided by Bombay Dyeing and Manufacturing Co., Ltd., of Bombay, India. Gherzi Eastern Ltd., a firm join~ly • owned by Bombay Dyeing and Gherzi Textil 01tganisation, of Zurich, Switzerland, witl serve as the company's consultants during the construction stages of the mill. (more) ..... '\ ~ IFC News Release No. 70/11 ~ Ceylon - 2 - Th~ new company will have share capital amounting to $5 .2 million, and loan capital of $8.64 m:Hlion. The sponsor and associated Ceylocase investors will provide approximately $3.13 million equivalent of the financing required. ln addition, approximately $820,000 will be raised through a public offering in Ceylon of the company's share~, to be underwritten by DFCC and the s1>onsor. IFC and PICA are providing financing of $3.25 million, consier~ing of an equity investment of $750,000 equivalent, a secured loan of $1.65 million, and another loan of $850,000, convertible at par into ordinary shares of the company, at the option of IFC. • A Japanese firm, Mitsut and Co., Ltd., is making an equity investment of $336,000 equivalent i.n the new company. II II II •