Washington D.C., May 18, 2004 —The International
Finance Corporation, the private sector arm of the World Bank Group, and
Citigroup Inc. have arranged a $175 million financing package to support
the corporate restructuring and global debt refinancing of Copamex S.A.
de C.V., a leading manufacturer and distributor of paper-based consumer,
packaging, printing, and writing products in Mexico and Central America.
The financing package includes loans of $75 million for IFC’s own account
and a $100 million equivalent multicurrency syndicated facility.
IFC has provided an eight-year, $50 million senior loan to Copamex’s subsidiary,
Copamex Productos al Consumidor, S.A. de C.V. (CPG), which is a 50-50 joint
venture with Swedish-based SCA Hygiene Products AB, a leading European
manufacturer of paper-based consumer products. IFC has also invested an
eight-year, $25 million subordinated convertible loan in Copamex.
The six-year, $100 million syndicated facility, which has also been provided
to CPG, consists of a $46 million loan for the account of foreign commercial
banks participating in IFC’s B-loan program and a $54 million equivalent
Mexican peso parallel loan for the account of local commercial banks. The
syndicated facility was oversubscribed in the market by $35.5 million.
IFC also provided Copamex with currency swaps to hedge the dollar loans
back into pesos.
“The long-term local currency loans provided by the financing package,
as well as the corporate restructuring that expands the partnership with
SCA, will help Copamex put itself on a sustainable path to achieving its
potential for growth. We are pleased to be part of this process.
IFC will also continue to assist Copamex in its efforts to improve sustainability
in its environmental, social, and governance practices,” said Bernard
Pasquier, IFC’s director for Latin America and the Caribbean.
“This transaction represented an important part of our debt reduction
and overall refinancing plan, which has been successfully completed. We
are very pleased with the results of the syndication process and results
of the overall refinancing plan,” said Sergio de la Garza, corporate director
He added that the plan entailed a series of transactions: a financing package
from the IFC, the syndicated loan arranged by IFC and Citigroup, the sale
of 50 percent of the company’s consumer products business, the release
of guarantees provided by subsidiaries of Copamex to holders of outstanding
long-term local bonds, and the previously announced sale of the company’s
multiwall sack business. The plan allowed Copamex to redeem its 11.375
percent senior notes due 2004 and to refinance the rest of its outstanding
debt with maturities of up to eight years, and with peso-denominated and
peso-equivalent funding to mitigate exchange rate risk.
Rabobank and HSH Nordbank joined the IFC B-loan as coarrangers; International
Finance Participation Trust and Norddeutsche Landesbank as lead managers;
and State Bank of India as participant.
Banco Nacional de México, S.A., a subsidiary of Grupo Financiero Banamex,
a unit of Citigroup, acted as administrative agent for the Mexican peso
parallel loan. Other institutions joining the parallel loan include BBVA
Bancomer as a coarranger; Banorte and Scotiabank Inverlat as lead managers;
and Comerica Bank Mexico as participant.
“We are pleased that the refinancing of Copamex’s debt has been successfully
concluded. This was a complex deal that involved a series of interdependent
refinancing efforts and the sale of important company assets, and it required
very close coordination of the various teams involved. The company’s management
did an excellent job of coordinating all parts of this landmark transaction,”
said Mario Espinosa, Citigroup´s managing director of global loans for
Copamex is one of Mexico’s leading producers of paper-based consumer products
and value-added industrial paper products, including packaging and printing
and writing products. It has transformed itself from a producer primarily
of industrial paper products into one of the premier producers of paper-based
consumer products and value-added industrial paper products. Copamex has
a leading portfolio of consumer brands of tissue and personal products,
including Regio, Scottis, Lovly, Flen, Boreal, Saba, and Tena. The company’s
strategy is to focus on consumer and value-added packaging products and
to grow the business through effective marketing and development of innovative
Citigroup, the preeminent global financial services company with some 200
million customer accounts in more than 100 countries, provides consumers,
corporations, governments, and institutions with a broad range of financial
products and services, including consumer banking and credit, corporate
and investment banking, insurance, securities brokerage, and asset management.
Major brand names under Citigroup's trademark red umbrella include
Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and Travelers
Life and Annuity.
Grupo Financiero Banamex is part of Citigroup. Through its banking subsidiary
Banamex and its brokerage house, Accival, Grupo Financiero Banamex offers
a broad range of financial services including corporate and investment
banking, retail banking, insurance, pension fund management, and brokerage
services, among others.
IFC's committed financing in Latin America and the Caribbean amounted to
$2.18 billion in fiscal 2003 for 54 projects over 16 countries, its highest
level of investment in any region.
IFC’s mission (www.ifc.org)
is to promote sustainable private sector investment in developing countries,
helping to reduce poverty and improve people's lives. IFC finances private
sector investments in the developing world, mobilizes capital in the international
financial markets, helps clients improve social and environmental sustainability,
and provides technical assistance and advice to governments and businesses.
Since its founding in 1956 through the close of the last fiscal year on
June 30, 2003, IFC committed more than $37 billion of its own funds and
arranged $22 billion in syndications for 2,990 companies in 140 developing
countries. IFC's worldwide committed portfolio at the end of FY03 was $16.8
billion for its own account and $6.6 billion held for participants in loan