Announcement of IFC Investment in Mexico on September 11, 1957

PRESS RELEASE NO. 7 FOR RELEASE A.M. Newspapers SUBJECT: IFC Investment in Mexico Wednesday, September 11, 1957 ~obert L. \·~'Ga.mer, President of the International Finance Corporation, announced today that the Corporation has reached agi•eement, subject to com- pletion of the necessary legal formalities, for an ip.vestment of the equivalen~ of U.S.$520,000 (half in U.S. dollars a.nd half in Mexican pesos) in Bristol de Mexico, S .A. for an aircraft ·engine overhaul and repair shop. Bristol de Mexico i& owned by The Bristol Aeroplane Company of Cariada., the majority stockholder; Aeronaves de Mexico, S.A., a leading Mexican airline; and other private Mexican inves:tors. Bristol of Canada. 1:s a subsidiaJ.'"Y of The Bristol • . . Aeroplane Company Limited o:f England. Th~ Corporation's investment, together with an investment equivalent to $912,000 by the shareholders of Bristol de Mexico, will finance the establishment of the overhaul and repair shop adjoining the Mexico City airport. The plant will be equipped to process engines, of the types used in DC-3, DC-4, OC-6 and Convair aircraft, which are most widely used in Mexico. This is the first shop in Mexico fully equipped to hand.le the complete over- haul and testing of such engines. The plant has a capacity ~o overhaul about. 480 engines of the three principal types per year. Plant construction is completed, and :preliminary operations are getting under way. The Aeronaves Airline/ -w:l.ll subscribe its shar~s in Bristol de Mexico 1 in the form of inventory of spare engine parts and equipment accumulated in • its repair shop a.t Torreon which it has now closed. Aeronaves has contracted with Bristol for a.ll its engine overhaul a.nd repair business. J - 2 - Bristol de Mexic9 has entered into a management contract with Bristol ••• of Canada which has furnished an experienced engineer to be general manager of the Mexican company; additional management and supervisory personnel will be provided as needed. The nucleus of the work force consists of the traj_ned mechanics and foremen transferred from the Aeronaves shop, augmented by selected students trained by the International Civil Aviation Organizat,ion Center at the Mexico City airport. IFC 's investment of the equiva.lent o~ U.S.$ 520,000 will be in Notes, · hal.f denominated in dollars and half in pesos.: Both the "dollar and. peso i1 por-'c;ions Will bear interest at 7°/o per annum, with amortization in thirteen semi-annual instalments starting October 1, 196o. The Corporation receives a nine-year option on shares equivalent to 50'/o of its total investment. J In addition IFC will receive additional contingent interest payments dependent •••• upon the a.mount of earnings. at par. The Company may redeem the Notes at any time