The Company is 60% owned by Nexxus Capital Private Equity Fund III, a private equity fund that targets investments in middle-market Mexican companies. The remaining 40% is owned by a minority shareholder. After the transaction, the minority shareholder’s stake will be sold to IFC, HSBC and DEG.

Total project cost is estimated at $20 million. IFC will provide a $7.9 million equity investment.

7.81 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	7.81

* These investment figures are indicative

Harmon Hall’s headquarters are located in Mexico City. The Company has English Schools located in 63 different cities across Mexico and one in Guatemala. The Company has K-12 schools located in Cancun and Hermosillo.

By supporting Harmon Hall, IFC will have the following development impact: (i) expansion of access to high quality English education and primary and secondary education: Consolidation of Harmon Hall presence, as well as further expansion into new markets, will expand the availability of high quality English education in the country, which provides skills necessary to compete and advance in the national job market; (ii) creation of employment opportunities: as a result of its expansion, Harmon Hall hires additional teachers and sales personnel to serve its growing student base, thereby helping to improve living standards and contributing to human capital development; (iii) expansion of high quality training: Harmon Hall provides training support to all its personnel in order to ensure a healthy pipeline of high quality trained staff to serve its current and future schools; (iv) standard setting among English language schools: the high quality standards by which Harmon Hall operates will set a precedent in the English education market, which will generate pressure on other competitor schools to pursue accreditation and quality standards; (v) community engagement: Both K-12 and English schools provide scholarships to students who cannot afford the tuition. Additionally Harmon Hall has begun to engage with public schools to provide the English program within their regular program. By doing so, more low income students will have access to quality English education which today is inexistent in the public system.

IFC’s expected additionality in the proposed investment includes IFC provision of: (i) support in assisting the Company’s IPO in a local or foreign stock exchange, (ii) the necessary capital when limited equity investors exist given the current the market conditions, (iii) advice in E&S best Practices. (iv) Global expertise and knowledge in the education best practices, and (vi) guidance in improving corporate governance initiatives.

This Project will have limited impact on the surrounding environment and has been classified as a Category B according to IFC’s Environmental and Social Review Procedure, as issues can be addressed through known and accepted procedures and technologies to avoid or mitigate social and environmental impacts. The key social and environmental issues associated with the Harmon Hall Schools Project, which operate their own and franchised facilities, in leased properties, many of them shopping malls, include: developing an environmental and social management system (ESMS), addressing life and fire safety issues in their facilities and community engagement. General human resource policies are in place, with no evidence of restriction of freedom of association. The company will need to formalize some procedures and develop a site selection criteria and grievance mechanism for employees and neighbors.