SEOUL, KOREA, November 13, 1998 --- As
part of its response to the current economic crisis, the International
Finance Corporation will help a leading brass manufacturer in Korea to
restructure by investing up to US$32 million in Dae Chang Industrial Co.
Dae Chang has production capacity of 90,000 tons per year and supplies
about one-third of the Korean market. The company nearly doubled
export sales in 1998 compared to the previous year. As a result of
the financial and operational restructuring, the company expects to be
in a much stronger position to take advantage of the expected recovery
in domestic demand, which has dropped significantly during the economic
crisis, and to increase its competitiveness in export markets. Since
the company's manufacturing process is based on materials recycling, its
increased production will further benefit the Korean economy by promoting
Dae Chang is owned by the Cho family of Korea, domestic portfolio investors,
and public shareholders. The Cho family has specialized in brass
manufacturing for about a quarter-century and helped the company attain
IFC today signed agreements for loans of up to $25 million and an equity
investment of up to Korean Won 10 billion (approximately $7 million) for
IFC's own account. IFC is helping the company attract an additional $4
million in foreign direct investment.
The restructuring, at a total cost of $60.3 million, will help the company
meet increased working capital requirements brought about by the difficult
economic environment and fund product development to support exports. IFC
has helped the sponsors develop the restructuring plan, which includes
new approaches to the efficient management of working capital.
Mr. Javed Hamid, IFC's Director for East Asia and the Pacific, said that
the restructuring would strengthen the company's viability and increase
operating efficiency. He predicted that it would also increase business
confidence in Korea, especially for foreign investors seeking opportunities
in similar companies -- a key to Korea's long-term recovery.
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.