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IFC BECOMES LEAD ADVISOR IN PRIVATIZATION OF MIDDLE EAST AIRLINES


Jannette Esguerra
Phone: (202) 458-5204
Fax: (202) 974-4384
E-mail: jesguerra@ifc.org


WASHINGTON, D.C., July 3, 2000 — The International Finance Corporation today signed an agreement with the Banque du Liban (BdL), Lebanon's central bank, to act as lead advisor in the divestment of BdL's shares in Middle East Airlines (MEA), the country's flagship carrier. The Banque du Liban currently owns 99.37% of the shares in MEA.
Over the past several years, the Lebanese economy has undertaken dramatic modernization and, as a result, air traffic through Beirut International Airport has grown at an above average pace. In order to satisfy this demand and to reposition MEA as a major player in the international air carrier market, the Government of Lebanon decided to pursue a strategic partnership with a strong international airline. The partnership is expected to provide the capital and expertise needed to integrate MEA into the global airline market.
IFC will help design and implement a divestment plan for BdL's shares in MEA, identify potential investors, market the project, and organize and implement an international tender for the strategic partnership.
Mr. Riyadh Salameh, Governor of the Banque du Liban, called the divestment a milestone for Lebanon that will provide momentum to the country's privatization program and pave the way for further restructuring of the economy. IFC's track record for transparency, and its ability to deal effectively with both governments and the private sector in structuring successful transactions make the Corporation the right choice for this program, he added.
In addition to strengthening MEA's position in the international air carrier market, this strategic alliance will help contribute to the further growth of the Lebanese economy, said Mr. André Cracco, Director of IFC's Corporate Finance Services. IFC believes that there is a strong potential for growth for MEA.
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.