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IFC TO FINANCE ROMANIAN AUTOMOTIVE PARTS MAKER


Brigid Janssen
Phone:(202) 473-7700
Fax:(202) 974-4384
E-mail:bjanssen@ifc.org


BUCHAREST, ROMANIA, November 3, 1998 --- The International Finance Corporation today signed an agreement with Krupp Compa Arcuri S.A. to provide a DM20 million loan for construction and operation of an automotive leaf spring and coil spring production facility in Sibiu, Romania.

Krupp Compa Arcuri S.A. is a joint venture between Krupp Hoesch Federn GmbH (73 percent), Europe's leading producer of leaf springs, and Compa S.A. (27 percent), a long-established Romanian automotive component manufacturer.  The plant is expected to become Krupp Hoesch Federn's principal source of leaf springs for the wider European market.  It will produce 30,000 tons per year of the springs which provide suspension for commercial vehicles.  Coil springs will be produced for the Eastern European markets.


IFC is providing a loan of DM14 million for its own account and is syndicating an additional DM6 million with ING Bank Deutschland.  The sponsors are financing the balance of the DM55 million project cost.


This Romanian joint venture follows an earlier one between another Krupp Group company (Krupp Bilstein GmbH) and Compa S.A., that recently obtained IFC financing to produce automotive shock absorbers for export to Western European original equipment manufacturers and Romanian market.  The two joint ventures combined are expected to employ up to 2,000 people and generate annual export earnings of up to US$50 million.


Mr. Gerhard Liedl, General Manager of Krupp Compa Arcuri and Mr. Harold Rosen, IFC Director for Central and Southern European Operations signed the loan agreement at IFC's mission in Bucharest. Mr. Rosen, who will be meeting with the Prime Minister of Romania and other members of the cabinet during his visit, said that both Krupp Compa Arcuri and Krupp Bilstein Compa are excellent examples of joint ventures which create new employment, increase export earnings and, most importantly, support the transition to a market economy through Romanian companies that are internationally competitive.  Mr. Rosen congratulated Compa management for seeking out foreign joint venture partners and urged other Romanian enterprises to follow that example.


IFC, part of the World Bank Group, fosters economic growth in the developing world by financing private sector investments, mobilizing capital in the international financial markets, and providing technical assistance and advice to governments and businesses.