22376 - Lojas Americanas S.A. II

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Summary of Proposed Investment

Project Number

22376

Company Name

Lojas Americanas S/A.

Date SPI Disclosed

May 10, 2004

Country

Brazil

Industry

Tourism, Retail and Property

Projected Board Date

Jun 24, 2004

Status

Completed

Sector

Retail (Including Supermarkets, Grocery Stores, etc.)

Department

Regional Industry - MAS LAC

Environmental Category

B - Limited

Previous Events

Approved : Dec 16, 2004
Signed : May 13, 2005
Invested : Sep 30, 2005

Project Description

Lojas Americanas (LASA or the company) is one of the most traditional retail chains in Brazil with a broad range of convenience food, apparel and general merchandise items. In activity for 74 years, the company has 121 stores located around 18 states and in the Federal District of the country, with a concentration of 62% of its stores in the Southeast region. The chain employs around 7,800 people and sells more than 80,000 items from 3,000 different companies. In June 1999, the company launched its web-based retail operations (Americanas.com), which currently receives more than 1 million visitors monthly. LASA is also active in providing financial services, through its fully owned subsidiary Facilta Serviços e Propaganda S.A., which has been operating in the market since 1984. In 1998, in partnership with other companies, Lojas Americanas launched the Smart Club, the first multi-loyalty program in Latin America.

The proposed project aims to finance the following components:

- Capital investments to support the expansion of stores in all regions of Brazil, focusing in the North, Northeast and Midwest;
- Expansion of Americanas.com,
- Upgrade of management information systems and
- Working capital requirements.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	35.0
Equity

Development Impact

The proposed IFC investment will contribute to extend the benefits of discount modern retail chains to Brazil’s poorest regions. The development of the formal retail sector offers opportunities to significantly decrease retail prices by making logistics and distribution more efficient. It plays an important role in supporting small businesses by continuing to raise quality and product standards and by stimulating demand for locally produced consumer products.

IFC’s role in this project is threefold:

- Long-term financing:

IFC’s investment in the project will provide necessary long-term financing for a medium-sized Brazilian company. Following the political uncertainty in Brazil, long-term financing to Brazilian companies has been severely restricted. The lack of such financing has been a major constraint on the development of the private sector. IFC’s support will allow a commercially viable and efficient mid-sized company to grow and compete.

- Promote Small and Medium Enterprises Linkages:

The proposed investment in Lojas Americanas will provide IFC with an opportunity to design and implement, together with the company, a program to develop linkages with small and medium enterprises that supply the company, especially in Northern Brazil, to improve their quality standards, logistics and inventory management practices.

- Enhance the prospects for competitiveness and growth:

IFC’s investment will support an efficient Brazilian enterprise to grow and improve its competitiveness both in its predominant region as well as in frontier regions within Brazil.

This is a Category B project according to IFC’s procedure for environmental and social review of projects. Environmental, occupational health and safety issues associated with this project include: solid waste treatment and disposal, fire prevention, emergency response, and safety training.
Location of environmental documents In locally affected community
Environmental documents related to the project will be placed in the company’s internet site: http:/ri.lasa.com.br/. In addition, after the store locations have been selected and approved by management and prior to store opening, environmental documents related to the project will be available to the local community at the future store site, or in the board of information of the shopping mall where the store will be located, as well as in the local library or community center closest to the future store site of the city where the store will open. Environmental documentation will be available at the following locations for public consultation starting on May 5, 2004:

- Bahia, Salvador, Shopping Iguatemi Salvador; address: Av. Antonio Carlos Magalhaes s/n;
- Pernambuco, Recife; address: Rua Sete de Setembro, 267;
- Rio de Janeiro, Laranjerais; address: Av. Das Laranjeiras, 49 a 51.

Contacts

For Inquiries About the Project, Contact

Mr. Roberto Martins de Souza, Chief Financial Officer
Lojas Americanas S/A
Rua Sacadura Cabral, 102 – Saude
CEP 20081-902 – Rio de Janeiro – RJ
Phone: 55-21-2206 6556
Fax: 55-21-2206 6687

This Summary of Project Information (SPI) is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC's activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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