Announcement of IFC Supports Mexican-French Joint Venture Fifteen Million Sixty Thousand US Dollars for Stainless Steel Project on June 17, 1975

' \ ' • f ' FOR IMMEDIAT.E RELEASE ...... International Finance Corporation 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. 202-393-6360 I f \ • 'I \" - • , ,c ~, •' IFC Press Release No. 75/10 Tuesday, June 17, 1975 IFC Su orts Mexican-French Joint Venture l .6 Million for Stainless Steel Pro ect The International Finance Corporation (IFC), an affiliate of the World Bank, is investing $12 million in loan and $3. 6 million in equity in Mexinox S_.A. to establish an integrated stainless steel operation in Mexico. The project, the first phase of a long-term program, will cost $83.6 million. Sponsors of the project are the Fundidora Monterrey S.A. Group, which operates the second largest steel company in M~xico, and Pechiney-Ugine-Kuhlmann of France, a leading European metals and chemicals producer. IFC previously helped finance two major Fundidora expansions. • The two sponsors are subscribing to approximately $17.5 million of Mexinox's equity. An additional $8.1 million in capital is being provided by Nacional Financiera S.A., Fina.nciera Bax.am.ex S.A., Financiera del Atlantico S.A. and other Mexican investors, and $400,000 by internal cash generation. Debt financing consists of IFC's loan, suppliers' credits of $39 million and a $3 million subordinated shareholders' loan. The initial phase consists of the construction and· operation of a 40,000 metric tons-a-year stainless steel cold rolling mill. Later stages are to include processing of hot rolled coils and stainless steel ma.king facilities. The project is the first step to ensure a domestic supply of stainless steel needed for the expansion of a wide variety of industries. At present, Mexico imports all of its stainless steel products. Mexinox' s plant ·t-til.l be built at San Luis Potosf, about midway between Monterrey, w.bere Fundidora is located, and Mexico City. The first phase will create about 500 jobs and will introduce a new technology in Mexico • • (Any inquiries strictly relating to IFC's participation in this project should be directed to the IFC Business Relations Unit, 1818 H Street, N.W., Washington, D.C. 20433, Telephone (202) 477-2355).