Summary of Proposed Investment
Project Number
8722
Company Name
PATAGONIA ON LINE
Date SPI Disclosed
Jan 23, 1998
Country
Argentina
Industry
other
Status
Completed
Sector
Private Equity/Venture Cap Fund - Country
Department
Equity Portfolio Management
Environmental Category
FI
Previous Events
Approved : May 8, 1998
Signed : Jun 5, 1998
Invested : Jan 5, 2000
Project Description
Summary Of Project Information (SPI)
| Project Name | ARGENTINA - Patagonia Fund |
| Region | Latin America and the Caribbean |
| Sector |
Projected Board DateFebruary 23, 1998
Company NamePatagonia Fund (Patagonia or the Fund)
Technical Partner and/or Major Shareholders
The principal sponsor of the Fund is Merchant Bankers Asociados S.A.(MBA), a leading independent investment bank in Argentina, with activities in stock broking, corporate finance, asset management and securities trading. IFC has been a shareholder in MBA since 1991, initially with 20% holding in its stock broking arm, MBA Bolsa. In 1996, IFC converted its holding in MBA Bolsa to a 3% holding in MBA, S.A., the holding company of the group. The other sponsor of the Fund is Electra Fleming Ltd, one of the leading managers of private equity in the U.K. Also, for a period of one year, the investment rights on the deal flow from the joint efforts of Patagonia and the Darby group (a shareholder of MBA), will be evenly divided (50%-50%) between Patagonia and Darby.
Project Cost Including proposed IFC investment
IFC will invest up to US$20 million in equity or up to 25% of the total commitments to the Fund and have a seat on the investment committee. In addition, approval is sought for IFC management discretion to exercise co-investment rights for up to US$10 million to co-invest with the Fund, in selected portfolio companies.
Location of project and Description of site
Argentina
Description of Company and Purpose of Project
The project involves establishing the Patagonia Fund, a US$55 million private equity fund, plus the Darby Agreement mentioned above, for mid-sized Argentine companies. IFC has been asked to support this new fund because of its experience in Argentina and because of its capacity to co-invest if required in specific investments. IFC expects to play an important institution building role in this project through developing local Argentine expertise in private equity management, while channeling scarce capital to medium sized companies.
Environmental Category and Issues
This is an environmental review category (FI) project. The Patagonia Fund Manager will be required to carry out an environmental review of eligible investee companies’ operations. In addition, IFC will assess the Patagonia Fund Manager’s capability to carry out environmental reviews.
| Date SPI sent to PIC | January 23, 1998 |
“This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporation’s Board of Directors. It is provided for the purpose of enhancing the transparency of IFC’s activities and should not be construed as presuming the outcome of IFC Board consideration.”
For Additional Information contact: Corporate Relations Unit -
telephone: (202) 473-7711
facsimile: (202) 974-4384
Sponsor / Cost / Location
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