IIC Approves Loan To Profertil S.A. In Argentina
11/02/2009Washington, D.C. - On November 3, 2009, the Inter-American Investment Corporation (IIC) approved a loan of up to US$65 million (comprising an A loan of up to US$10 million and a B loan of up to US$55 million) to Profertil S.A. in Argentina. Profertil produces and markets granulated urea (its main product) and ammonia, which are used as fertilizers in the farming industry. Approximately 65% of the company’s production is marketed locally; the rest is exported to countries in the region.
The project seeks to provide funding for investments in capital assets and for refinancing some of Profertil’s short-term liabilities. Through its A/B loan program, the IIC will play a catalytic role in attracting financing for Profertil from foreign financial institutions, on the same terms. The loan will enable the company to boost its operations by making cash flow planning and forecasting easier.
With this project, the IIC will provide medium-term financing, which is scarce on the local financial market and will enable the company to improve its financial profile. The loan will also support Profertil’s plans for expanding its production plant, thus strengthening a producer of a strategic agricultural input for Argentina and the region. Profertil is the only producer of granulated urea in Argentina and the MERCOSUR region. The company will pass financing on to fertilizer suppliers and, through them, to agricultural supply chains, which are key to the success of both the sector and Profertil.
"This operation is very important for Profertil because it provides financing on appropriate terms at a time when medium- and long-term financing is scarce in the region. This operation will also allow other international financial institutions to participate on equal tenor, rate, and security terms," said Hernando Lesme, IIC investment officer in charge of the operation.
The IIC is a multilateral financial institution that is a member of the Inter-American Development Bank (IDB) Group. It provides financing (in the form of equity investments, loans, guarantees, and other instruments) and advisory services to private enterprises in Latin America and the Caribbean. In 2008, the IIC reached US$1.5 billion in assets and approved sixty-four operations channeling US$300.5 million to SMEs in the region. The IIC’s mission is to promote the economic development of its regional member countries by encouraging the establishment, expansion, and modernization of private enterprises, particularly those that are small and medium in size. For more information on the IIC’s activities, please visit www.iic.int.
Contact: Hernando Lesme (in Paraguay)
Telephone: + (595 21) 616-2321