WASHINGTON, D.C., February 5, 1999 ---
The International Finance Corporation today signed an agreement to invest
US$20 million in Fras-Le S.A., a Brazilian manufacturer of automotive materials.
The financing package, consisting of a $10 million loan and an additional
$10 million in equity, will be used to modernize and expand Fras-Le's operation
as well as to retire high-cost local debt.
Fras-Le, based in Caxias do Sul in the state of Rio Grande do Sul, is Brazil's
leading manufacturer of friction materials for heavy vehicles and automobiles.
The company is controlled by the Randon Group, a medium-size entity
with other automotive interests, including manufacturing truck trailers
and semi-trailers. Fras-Le is listed on the Bovespa and its shareholders
include Brazilian institutional investors such as Previ and Petros.
The investment reflects IFC's continuing confidence in Brazil's private
sector, said Bernard Pasquier, Senior Manager of IFC's Latin America and
Caribbean Department who signed the agreement for IFC. Fras-Le is a relatively
small company with high-growth potential. It is characteristic of
the type of investment that IFC has been targeting in Brazil in recent
years. Mr. Joćo Dal Bello, Fras-Le's Finance Director, signed on behalf
of the company.
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.