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IFC’s Second Financing to Coppel in Mexico


 In Washington
Adriana Gomez

Phone: +1(202) 458 5204
Fax: (202) 974 4384

Email:
agomez@ifc.org


Washington, D.C., July 18, 2005 —The International Finance Corporation, the private sector arm of the World Bank Group, has signed an agreement to provide $35 million in long-term financing to Coppel, S.A. de C.V., one of Mexico’s leading retailers.  

IFC’s 10-year financing will support Coppel’s expansion plans: the company will consolidate as a national chain, enhance its credit business, and strengthen its corporate governance standards. The financing will also endorse Coppel’s $195.3 million strategic capital expenditure plans for the next three years. This is IFC’s second financing to Coppel, which received $30 million in 2002.


Coppel is a successful retail chain, with more than 250 stores in Mexico serving low- and middle-income segments of the population. Coppel sells a large range of merchandise and offers an efficient direct credit program, with extended payment periods, for people who have no access to credit cards or other financial aid. Coppel is listed on the Mexican stock market.


“This second financing in Coppel shows IFC’s commitment as a long-term partner. It also demonstrates our confidence in the company’s prospects, thus sending a positive signal to other potential lenders,” said Dimitris Tsitsiragos, IFC’s Director for General Manufacturing and Services.


Atul Mehta, IFC’s Director for Latin America and the Caribbean, noted that, “This financing is consistent with IFC’s strategy of helping the Mexican private sector gain greater access to long-term financing, thus helping local companies grow, improve their competitiveness, and create new jobs.”


Enrique Coppel, Chief Executive Officer of Coppel, added: “We value IFC’s commitment as a long-term partner and its ability to respond to the needs of its clients in a timely fashion.  Medium-sized retailing companies in Mexico have limited access to long-term finance, and working with IFC will give Coppel the opportunity to continue investing in our operations. Since our strategy is to expand operations nationwide, access to long-term funding is critical at this stage of the company’s growth.”


Mexico’s achievement of full investment grade in 2002 has facilitated the country’s access to capital, especially as regional markets have recovered from mid-2003 onward. This has allowed IFC to take a focused approach to the country’s development, targeting the sectors where investments can have the biggest economic and social impact.


In the fiscal year that ended in June 2004, Mexico was the country receiving the largest amount of IFC financing in dollar value. IFC invested a total of $707 million, including $259 million in syndications, in sectors ranging from infrastructure to manufacturing and the financial sector.  IFC’s total portfolio in Mexico was $833 million as of March 2005.


The mission of IFC
(www.ifc.org) is to promote sustainable private sector investment in transition economies, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the emerging markets, 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 FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.