Announcement of World Bank Affiliate Invests in Sri Lanka Textile Company Financing for Eight Million Sixty Thousand US Dollars Expansion on June 20, 1979

International Finance Corporation 1818 H Street, N.W. • IFC Press Release No. 79/35 Washington, D.C. 20433, U.S.A. 202-477-1234 .JW1e 20, 19 79 World Bank Affiliate Invests in Sri Lanka Textile Company Financing for $8.6 Million Expansion Sri Lankan investors, the International Finance Corporation (IFC) and two European development institutions are joining in an $8.6 million expansion of Ceylon Synthetic Textile Mills, Ltd. The project will more than double the Company's suiting fabrics and saree materials capacity to 6.9 million square yards a year. It will help meet local demand which substantially exceeds domestic production, reduce imports and save an estimated $2 million in foreign exchange a year, and create some 600 jobs. The Corporation is providing $440,000 equivalent in equity and $3,075,000 in loan, in which Societe Belge d'Investissement International is participating ~ for $1.2 million. The Netherlands Finance Company for Developing Countries is providing $1.31 million in loan and $500,000 equivalent in equity while The Development Finance Corporation of Ceylon is making a $500,000 equivalent loan and a $125,000 equivalent equity investment. The Bank of Ceylon is lending $1.2 million equivalent. A rights offering of $580,000 equivalent to existing shareholders, a $375,000 public share offering and $538,000 equivalent in cash generation complete the financial plan. The expansion will be implemented at the Company's plant site in Colombo. Equipment will be procured from Europe, India and Japan. A second phase in the expansion to provide additional weaving capacity is under study. IFC assisted the Company in structuring the project and in mobilizing the necessary financing. The project is in line with Government policies to encourage the private sector. Previous IFC investments in Sri Lanka were a loan tD the Bank of Ceylon to be relent to small and medium-scale industries and an equity invest- ment in The Development Finance Corporation of Ceylon, which is also investing in the Ceylon Synthetic Textile Mills expansion . • (Any inquiries strictly relating to IFC's participation in this project should be directed to the IFC Information Office, 1818 H Street, N.W., Washington, D.C. 20433, Telephone (202) 477-2032.)