Announcement of IFC Restructuring of Leading Argentine Textile and Shoe Company March 19, 1986

IP@ u/ Finance Corporation Wednesday, March 19, 1986 CONTACT: Don Roessner Press Release No. 86/29 (202) 676-0394 IFC HELPS RESTRUCTURE LEADING ARGENTINE TEXTILE AND SHOE COMPANY The International Finance Corporation (IFC) is joining with domestic and foreign financial institutions in an $80 million restructuring of Alpargatas S.A.I.C., the leading textile and shoe manufacturer in Argentina. IFC, the World Bank affiliate that assists developing economies by supporting their private sectors, is lending $14 million equivalent to Alpargatas. Of that amount, $4 million is for the account of an international group of banks composed of Arab Latin American Bank - ARLABANK, Morgan Guaranty Trust Company of New York, Union Bank of Switzerland, J. Henry Schroder Wagg & Co. Limited, and J. Henry Schroder Bank & Trust Company. Other loans are being provided by foreign commercial banks ($31 million) and local banks ($20 million). In addition, the Company plans to issue $10 million in preferred shares. Foreign and local bank debt rescheduling of $5 million completes the financial plan. Alpargatas is a major, established company whose performance has been hindered by domestic economic and financial conditions. The restructuring plan is a joint effort by the Company, shareholders and creditors to safeguard its medium and long-term viability. The restructuring includes stretching out debt maturities, decreasing the debt base, strengthening the capital structure by issuing preferred shares, and reducing interest expenses by refinancing expensive short-term debt. - 2 - These measures are complemented by operational adjustments already under way: reducing fixed overhead costs, working capital levels and capital investments, improving utilization of facilities, developing new products, promoting exports, selling non-critical assets, and implementing various production improvements. The project is in line with IFC's corporate restructuring assistance policy to join together with other creditors and shareholders to provide both technical and financial assistance to intrinsically sound companies hampered by difficult macro-economic conditions.