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.