Washington, D.C., December 14, 2005—
The International Finance Corporation, the private sector arm of the World
Bank Group, will provide $200 million to Suzano Petroquimica S.A., the
largest polypropylene producer in Latin America and Brazil’s second-largest
producer of thermoplastic resins.
IFC’s long-term financing will support a number of Suzano’s corporate
initiatives, including the now completed acquisition of a 50% shareholding
in Polibrasil and the debottlenecking of Polibrasil’s plants in Mauá and
Duque de Caxias. The investment will also support Suzano’s corporate restructuring
and will provide for debt refinancing, allowing Suzano to solidify its
position as one of the leading companies in Brazil’s petrochemical sector.
The investment consists of an A-loan of $50 million and a C-loan of $10
million for IFC’s own account, as well as a B-loan of $140 million for
the account of participant banks. Syndication of the B Loan was oversubscribed,
but the deal amount was kept at the original level of $140 million.
ABN AMRO, Banco Santander Central Hispano, FMO and Societe Generale have
joined the B loan as arrangers will final commitments of $ 26.25 million
each, while BBVA and Natexis have joined as participants with $ 17.5 million
Atul Mehta, IFC’s Director for Latin America and the Caribbean, said,
"We are delighted to support the Suzano Group with this
financing package. It is no coincidence that the group's forestry
and paper business was selected as one of the first companies listed in
the recently launched Sustainability Index (ISE) in Brazil's Bovespa.
IFC was a key sponsor of the ISE while Suzano was one the few companies
that met its stringent criteria. It is clear that we both share
a common vision and a commitment to sustainable business practices."
Rashad Kaldany, IFC’s Director for Oil, Gas, Mining, and Chemicals, noted,
“IFC has played a significant role in the development of Brazil’s petrochemical
industry, dating back to our financing of the country’s first petrochemical
project in the early 1970s. The sector is now in a second phase of
consolidation to enhance its global competitiveness. IFC remains committed
to supporting the industry by helping key players such as Suzano strengthen
their balance sheets and improve their sustainability policies and
João Pinheiro Nogueira Batista, Vice President of Suzano Holding and CFO
of Suzano Petroquímica, said “This financing operation underlines our
strategy to be a leader in this sector in a sustainable basis. Our commitment
to the capital markets has greatly improved how investors perceive our
risk,, which makes possible the financing of Suzano Petroquímica’s growth
and reduces our capital cost.”
IFC in Brazil
During fiscal year 2005, Brazil received the largest amount of IFC financing,
in dollar value, among Latin American countries. IFC invested $591million,
including $190 million in syndications, in sectors ranging from agribusiness
and transportation to manufacturing and the financial sector. IFC’s total
portfolio in Brazil was $913 million at June 2005.
IFC's strategy for Brazil focuses on enhancing clients' prospects for competitiveness
and growth, improving the country's social equity through voluntary actions
by the private sector, and continuing to promote sustainability.
These priorities entail investing in growing, export-oriented companies;
helping Brazilian companies expand internationally (including through South-South
investments); emphasizing infrastructure and logistics, notably public-private
partnerships that expand services to poorer people; and helping build financial
and capital markets. IFC also seeks to finance firms committed to environmental
and social sustainability, to help improve corporate governance, and to
support microfinance and socially-oriented entrepreneurship. Since 1956,
when Brazil joined IFC, the Corporation has provided $7.45 billion, including
syndications, for 162 companies.
The International Finance Corporation is the private sector arm of the
World Bank Group and is headquartered in Washington, D.C. IFC coordinates
its activities with the other institutions of the World Bank Group but
is legally and financially independent. Its 178 member countries
provide its share capital and collectively determine its policies.
The mission of IFC is to promote sustainable private sector investment
in developing and transition 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. From its founding
in 1956 through FY05, IFC has committed more than $49 billion of its own
funds and arranged $24 billion in syndications for 3,319 companies in 140
developing countries. IFC’s worldwide committed portfolio as of FY05 was
$19.3 billion for its own account and $5.3 billion held for participants
in loan syndications. For more information, visit www.ifc.org.
Suzano Petroquímica is the Latin American leader in the production of polypropylene
resins and the 2nd largest producer of thermoplastic resins in Brazil.
The company currently has a production capacity of 625 thousand tons per
year of polypropylene, distributed within its three facilities located
in Mauá (State of São Paulo), Duque de Caxias (State of Rio de Janeiro)
and Camaçari (State of Bahia).
ISuzano Petroquímica is a joint controlling shareholder of Riopol and Politeno,
polyethylene producers, and Petroflex, synthetic elastomer producer; both
products are raw materials for the converters, as the polypropylene.