Washington, D.C., July 1, 2003—The
International Finance Corporation, the private sector arm of the World
Bank Group, has signed an agreement to provide a medium-term standby
revolving credit facility of $30 million to LanChile S.A. This is IFC's
first project in this sector in Latin America. The facility will help strengthen
the airline’s long term working capital position.
The global airline industry has experienced several challenges in recent
years because of September 11, 2001, the economic slowdown, particularly
Latin America, fluctuating oil prices and, most recently, SARS.
LanChile is one of the leading airlines in Latin America with a strong
brand image and wide network. Together with its code-share partners and
affiliates, it operates a fleet of 56 passenger and cargo aircraft covering
a wide range of destinations both domestically and internationally. Despite
unprecedented challenges in the aviation sector, the airline has continued
to remain profitable in recent years.
Francisco A. Tourreilles, director of IFC's Infrastructure Department,
said: "IFC is pleased to support a company that provides efficient
transportation services to the Latin American region and beyond, and
has a high developmental impact on a wide range of economic sectors particularly
exports from Chile and other Latin American countries.”
Bernard Pasquier, director of IFC’s Latin America and Caribbean Department,
noted: "IFC’s support to LanChile is a good example of what
IFC stands for in the region, that is, we are committed to support the
private sector even when domestic and international banks have been
reluctant to increase their commitment and exposure.”
Enrique Cueto, CEO, LanChile, commented, "We are very pleased to welcome
IFC’s support to LanChile and the confidence they have shown in our airline
during this especially difficult time in the aviation sector.”
LanChile is the only Latin American airline listed on the New York Stock
Exchange, where its American Depositary Receipts are currently traded.
LanChile’s stock is also listed on the Chilean stock markets.
IFC's committed portfolio in Chile is $240 million. IFC's strategy in the
country has been focused in areas where investing can make a significant
developmental impact, with the objective of supporting a traditionally
strong private sector which has been affected by the decline in private
IFC's mission (www.ifc.org) is to promote sustainable private sector investment
in developing countries and transition economies, helping to reduce poverty
and improve people's lives. IFC finances private sector investments in
the emerging markets, mobilizes capital in the international financial
markets, helps clients improve social and environmental sustainability,
and provides technical assistance and advice to governments and businesses.
From its founding in 1956 through FY02, IFC has committed more than $34
billion of its own funds and arranged $21 billion in syndications for 2,825
companies in 140 developing countries. IFC's committed portfolio at the
end of FY02 was $15.1 billion for its own account and $6.5 billion held
for participants in loan syndications.