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IFC INVESTS IN MAJOR LATIN AMERICAN HOTEL OPERATOR


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


WASHINGTON, D.C., September 16, 1999 - The International Finance Corporation is investing US$60 million to support the leading hotel operator in Latin America through a difficult economic period for the region. Grupo Posadas S.A. de C.V. ("Posadas") will use the financing to restructure medium-term obligations and build five new hotels in Mexico.
Posadas operates hotels under its own brand names (including Fiesta Americana, Fiesta Inn and Caesar Park in South America, and The Explorean), and various other names under management contracts. The company currently operates a total of 58 hotels in Mexico, Brazil, Argentina and the United States.
Mr. Bernard Pasquier, Associate Director of IFC's Latin America and Caribbean Department said the project would support a long-standing IFC client through tough economic times in Latin America, when private funding is limited. Debt restructuring will help match the company's liabilities with the long-term nature of the hotel business. He said the construction of new hotels will increase the property base of Posadas, further consolidating its position in the Latin American hotel industry.
IFC's financing for the $175.6 million project totals $60 million, including an "A" loan of $25 million and a convertible "C" loan of $10 million for IFC's account. IFC is also making an equity investment of $15 million and will help mobilize up to $10 million for the account of participant banks. IFC is co-financing the transaction with DEG of Germany, which will make a Euro convertible loan of $5 million equivalent.
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.