Announcement of Additional IFC Investment in Industria del Hierro, S.A., Mexico on April 5, 1966

INTERNATIONAL FINANCE CORPORATION • 1818 H STREET. N.W .. WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6::\60 IFC Press Release No. 66/4 Subjeot: Additional IFC Investment in For Release AM Newspapers Industria del Hierro, S.A., Tuesday, April 5, 1966 Mexico The International F~nance Corporation (IFC), an affiliate of the World Bank, is subscribing along with investors in Mexico, France and the United States to a new issue of shares of Industria del Hierro, S.A., a Mexican company manufacturing a wide range of construction and industrial equipment. The issue, totaling Mex$ 25 million (US$2 million), is being made in the form of a rights offering to existing shareholders and is part of additional financing of Mex$ 75 million (US$6 million) required by the company to meet the needs of its expanding oper- • ations. The IFC investment, its second in the company, amounts to Mex$ 4.5 million (about US$360,000). Other shareholders exercising their rights to purchase the new sh.are~, which have been fully subscribed, are: Ingenieros Civiles Asociados, S.A. (ICA), a leading group of public works contractors in Mexico; Nacional Financiera, S.A., an agency of the Mexican Government; Banque Nationale pour le Commerce et l'Industrie, of Paris; Etablissements Neyrpic, a French company, through its associated firm, Alsthom; and Philadelphia International Investment Corporation, an affiliate of The Philadelphia National Bank, which purchased part of the fir8t IFC investment. The remainder of the financing is being provided by Nacional Financiera, in the form of a line of credit of Mex$ 50 million (equivalent to US$4 million). Established in 1948 under the sponsorship of ICA, Industria del Hierro • initially manuf'actured light construction equipment in a small plant located in ,- ' i Mexico City. - 2 - In order to expand the ~ompany 1 s operations and broaden the range of its products, the decision was taken to establish extensive new plant faci1i- • ties at Queretaro, about 140 miles north of Mexico City. The original IFC share investment of US$1.6 million, ma.de in 1964, helped to complete the financing needed to establish the new industrial complex, at a total cost of Mex$ 220 million (US$17.6 million). Industria del Hierro makes motor graders, soil compacting equipment and tower cranes under license f,...om U.S., French and Swedish manufacturers. A sub- stantial part of the company's operations consists of custom structura.1 and plate work, including the manufacture of storage tanks, bridges and other items. A subsidiary company, Link-Belt Speeder Mexicana, S.A., owned jointly by Industria • del Hierro and Link :Belt Company of the U.S., produces power shovels. Industria del Hierro has a technical assistance agreement in force with Neyrpic and Alsthom. •