Announcement of First IFC Investment in Lebanon Loan for New Cotton Spinning Mill on May 19, 1971

FOR IMMEDIATE RELEASE INTERNATIONAL FINANCE CORPORATION · · 1 8 1 8 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 The corrected heading of an announcement sent to you May 19 1 1971 1 is given below: IFC Press Release No. 11/S May 19, 1971 First IFC Investment in Lebanon Loan for lew Cotton·, SpiNlf:ng Mill . The International Finance Corporation (IFC) is helping to mdemize Lebanon's textile industry by making a loan investment of $930,000 in Filitex S.A.L., a new cotton spinning mill to be located near Beirut. The IFC loan to Filitex is the Corporation's first financing operation in 1.A:!banon. The Filitex plant will be equipped with 8t000 spindles and auxiliary • equipment, and is expected to employ 125 workers. Production is scheduled to start in 1973. The project is estimated to cost approximately $2.4 mil- lion. The mill will supply local knitted garment manufacturers with approx- imately 1,150 metric tons a year of combed cotton kni~ting yam. Lebanon's largest knitting firm, Naoum Mohbat & Company, is a member of the invest- ment group s~onsoring Filitex, and is expected to absorb a substantial part of the new mill's output. The knitting industry requires supplies of yarn of consistent quality, and the ~ebanese spinning industry, which is largely concerned with weaving operations, has not been able to provide them in the quantities required. Part of the establlshed demand for knitting yarns has therefore been met by imports. Filitex products will eliminate the need for iq,orts and will, indirectly. improve the availability of the yarns produced by the existing spinners. /more • IFC P.R. No.71/5 - Lebanon - cotton spinning mill - 2 - With its investment in Filitex, IFC, the member of the World Bank Group that encourages the growth of private enterprise, has now invested in 158 businesses in 44 developing countries. Financial Details IFC's loan of $930,000 accounts for 38% of the total financing for the project. The Arab African Bank, of Cairo, the United Arab Republic, and Union de Banques Arabes et Francaises, in France, are participating in tbf: IFC loan. Fifty-two per cent of the company's share capital of $923,000 has • been subscribed by the major sponsoring group -- Mr. Georges Mohbat, his family and family-owned knitting company, Naoum Mohbat & Company. mately 27% has been subscribed by the co-sponsor, Mr. Bahi~; Naamani, the Approxi- controlling owner of two trading firms in the textile and cosmetic markets, and 15% by Mr. Fouad Bohsali. Other Lebanese investors have taken up 6% cf the company's share capital. The remainder of the financing necessary to bring the mill into full ' . . operation will come from suppliers' ,credits, amotmting/fto $462,000, and // from cash generation, totaling $108,000. - 0 - ••