Announcement of IFC Finance of Indian Motorcycle Project September 4, 1986

International Finance Corporation Thursday, September 4, 1986 Donald Roessner FOR RELEASE: Press Release 87/14 CONTACT: (202) 676-0394 IFC HELPS FINANCE INDIAN MOTORCYCLE PROJECT The International Finance Corporation (IFC) is lending $6.0 million equivalent to Escorts Limited to help finance a $48.3 million motorcylee project in India in technical collaboration with Yamaha Motor Co. of Japan. The investment by IFC -- the leading multilateral institution that assists the economic growth of developing countries by investing in their private enterprise sectors -- is its second investment in Escorts, which is a major, diversified Indian manufacturing and trading company. A decade ago, the Corporation helped to finance Escorts' piston and pin factory in Bangalore, Karnataka. This loan has been fully repaid. The-new facility will be located at Surajpur, about 30 kilometers southeast of New Delhi. It will enable Escorts to produce annually up to 150,000 motorcycles of 100 cc capacity and other Yamaha models. The company is aiming at almost complete indigenization of production by 1990. This project, together with a separate expansion being implemented by the company, will increase Escorts' two-wheeler capacity from 81,000 vehicles a year in 1984 to 300,000 vehicles by 1990. IFC's loan consists of three components: Japanese yen, Swiss francs and U.S. dollars. A Citibank, N.A. loan of $2.0 million, deferred payment local supplier credits of $1.7 million, other long-term debt of $4.0 million and $34.6 million in cash generation are also part of the financial plan. MORE - 2 - The Escorts project is in line with the Indian Government's policy of encouraging expansion of India's two-wheeler industry and will help meet growing demand for such vehicles. It will also benefit the economy by reducing the need to import components, provide jobs for some 1,000 workers in a less developed area in India, introduce new technology into the country and support the parallel expansion of domestic companies that are expected to supply about 70 percent of the ancillary components. Escorts' stock is widely held and is traded on India's major stock exchanges. -0-