Announcement of IFC First Investment in Shipping Industry October 21, 1986

nternational Finance FOR RELEASE: Tuesday, October 21, 1986 Monique Amaudry Press Release No. 87/22 (202) 676-9331 IFC MAKES ITS FIRST INVESTMENT IN SHIPPING INDUSTRY The International Finance Corporation (IFC) is making its first investment in the shipping industry with US$10 million in equity and loan for Great Eastern Shipping Company Ltd. (GESCO, the company) -- the largest private sector shipping concern in India. This financing will help the company to implement its current fleet expansion and modernization program. Great Eastern Shipping operates a fleet of vessels, both owned and chartered, in the region of 1 million DWT, that carry petroleum products, crude oil, iron ore and other dry bulk cargo. The fleet also has four anchor-handling tug-supply vessels for servicing the offshore oil industry. The company plans to purchase both new and second hand ships, including dry cargo ships, petroleum product tankers, offshore supply vessels and specialized carriers. In addition, the company will modernize its existing vessels with a program that includes installation of communications and pollution control equipment, improvement of cargo handling and hold cleaning equipment and installation of fresh water generators. - MORE - - 2 - IFC is the leading multilateral institution that assists the economic growth of developing countries by investing in their private enterprise sectors. The IFC investment in GESCO consists of US$2 million in equity and a US$8 million subordinated loan, with options to purchase additional shares. The balance of the project cost will be met by equity of US$20.1 million equivalent, additional long-term borrowings of US$10 million, and US$5 million in cash generation. As a result of this financing, the capital base of the company will be strengthened significantly. Although many companies have been hard pressed because of depressed conditions in the shipping industry, Great Eastern Shipping has remained in sound condition because of its relatively young fleet, strong capitalization and efficiency. The company's stock, which is traded on the Bombay Stock Exchange, is held by the Sheth and Bhiwandiwalla families, by public financial institutions and banks, and by more than 49,000 shareholders. - END -