IFC draws up investment proposals in India, Indonesia and Thailand
Two of the proposals are pending approval, while the other is pending disbursement
23 Sep 2020 | Chito Santiago
The International Finance Corporation (IFC) is proposing investments in three companies in Thailand, India and Indonesia to fund their expansion programmes and meet their long-term working capital requirements. The investment proposals in Thailand and Indonesia are pending approval, while that in India is pending disbursement.
In Thailand, IFC has recommended investing up to US$150 million equivalent in A-loan and mobilization of up to US$150 million equivalent in parallel loans to Indorama Venture Global Services Limited (IVGS). IVGS is a subsidiary of Indorama Ventures Public Company Limited (IVL), which is one of the world’s leading petrochemicals producers with a global manufacturing footprint across Asia-Pacific, Europe, Americas and Africa. The company’s portfolio comprises integrated polyethylene terephthalate (PET), olefins, fibres, packaging and specialty chemicals.
The expansion of recycled PET capacity and other sustainability projects will be implemented across IVL’s existing and planned manufacturing facilities located in Thailand, the Philippines, Indonesia, India and Brazil.
IVL is a global intermediate petrochemical producer and one of the largest vertically integrated polyester value chain producers in the world, serving global brands in diversified end-use markets, including food, beverages, mobility, personal care and healthcare. Listed on the Stock Exchange of Thailand, the company is owned 64.75% by the Lohia family, while the remaining 35.25% is held by institutional and retail shareholders.
In India, IFC is proposing to invest in Ramkrishna Forgings Limited to finance its long-term working capital requirements, maintenance capital expenditures and to provide a much-need liquidity during the current pandemic, which will help in a swift recovery once operations ramp up.
The proposed investment, announced on September 21, can be executed in two ways: subscription to unlisted, secured non-convertible debentures (NCDs) up to 1.1 billion rupees (US$14.6 million) issued by Ramkrishna, and at IFC’s option, subscription of NCDs and/or an equity/quasi-equity instrument, aggregating up to 400 million rupees issued by Ramkrishna.
An existing IFC client, Ramkrishna is one of the leading forged component manufacturers in India supplying to major manufacturers of commercial vehicles and to the railway sectors. It operates six manufacturing plants in the states of Jharkhand and West Bengal.
In another proposal announced on September 17, IFC is investing up to US$120 million through an extension of a loan facility to support the development of two logistic property facilities in Indonesia owned by LOGOS Property Group. The two projects are a single-storey warehouse located in Cikarang, West Java owned by PT LOGOS Indonesia Deltamas One and two three-storey ramp-up warehouses located in Cibitung, West Java, owned by PT LOGOS Indonesia Prime One.
The total cost of the project is estimated not to exceed about US$286 million. The proposed IFC senior loan facility will comprise of an A loan of up to US$73 million for IFC’s own account, and a trust loan of up to US$47 million from IFC acting in its capacity as implementing entity for the Managed Co-Lending Portfolio Programme.
Founded in 2010, LOGOS Property is one of the leading logistics property groups in Asia-Pacific with operations across Australia, China, Singapore, Indonesia, Korea, Malaysia, Vietnam, India and New Zealand. LOGOS Property established a platform LOGOS Indonesia Logistics Venture under its Southeast Asia arm to develop and own high quality, modern warehouses in Indonesia.
LOGOS Indonesia Logistics Venture has about US$280 million in committed capital from its limited partners, namely LILV Sponsor Investment Pte Limited, Canada Pension Plan Investment Board and Ivanhoe Cambridge, the real estate subsidiary of Caisse de depot et placement du Quebec. Both PT LOGOS Indonesia Deltamas One and PT LOGOS Indonesia Prime One are wholly-owned subsidiaries of LOGOS Indonesia Logistics Venture.