Announcement of IFC Investment in Paper Industries Corporation of the Philippines (PICOP) on February 11, 1970

HOLD FOR RELEASE INTERNATIONAL FINANCE CORPORATION 1818 H STREE·T, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IFC News Release No. 70/2 Subject: IFC Investment in Paper For Publication in Morning Industries Corporation of the Newspapers of Wednesday, Philippines (PICOP) },e·t>ruary 11, 1970 IFC HELPS TO FINANCE INTEGRATED PULP AND PAPER MILL IN THE PHILIPPINES The International Finance Corporation, of the World Bank Group, is helping tu finance the addition of a $68.6 million pulp and paper mill to a Philippine lumber manufacturing company. IFC's investment in Paper Industries Corporation of the Philippines (PICOP) • t-ocludes a $1..28 million equivalent equity commitment and a standby comm:f.tment u.we-ring $2 .18 million of a $6 .03 million equivalent public offering of PICOP stock. Th~ sponsors of the project are the Soriano Group of companies, of the I:'h:tlippines, and International Paper Company, a United States pulp and paper ~· 1.oducer. International Paper is subscribing to $1.54 million equivalent of PICOP shares,. or;r1 San Miguel Corporation, a Soriano Group company, is making a share subscriptll"Jn. of $1.28 million. PICOP and its wholly-owned subsidiary, Bislig Bay Lumber Company, Incorporateds ~.:l'"E: cur,:-ently engaged in logging, and the manufacture of plywood, veneer and sawn 1 \~~£her. The addition of a pulp and paper mill to these operations will give Snut·.heast Asia its first integrated forest products complex. PICOP operations _are Jn. Surigao del Sur, in the southern island of :t-'findanao • • (more) ,.... . •• IFC: News RE~1~uB~? N"l. 10/2 ... Phil:tppi:nes . - 2 - The new mill will produce 150,500 tons of newsprint paper, linerboard, and corrugating medium. Newsprint and linerboard are not now produced in the Philippine~, and only small amounts of low ~rade corrugating medium are manufactured locally. PICOP will sell its paper products to customers in the Philippines. The project is expected to result initially in net foreign exchange savings of $15 million a year by substituting local producti.on for imports. The Filipino underwriting syndicate handling the public offering of PICOP '3°tbck is headed by Bancom Development Corporation, a joint venture comprising a "E'.llipino investor group and Bankers Trust Company, of New York. The other rqembers ~f the underwriting syndicate are the Private Development Corporation of the Philippines, a development finance company which IFC helped to organize in 1962; • 'X:P Securities Corporation; and House of Investments, Inc. Funds from the sponsors and IFC will be supplemented by suppliers' credits A~ounting to $36.74 million, to be provided by a Japanese syndicate of equipment -;n~mufacturers; a long-term loan of $3 million from Manufacturers Hanover Trust Company, of New York; and internal cash generation of $11. 73 million. Approximately $;' million equivalent has already been spent on the project by PICOP. II II II •