IFC transfers exposure in Bataan Polyethylene to Polymax

The International Finance Corp. (IFC) has transferred to UK holding firm Polymax Worldwide Ltd. all rights and interests in its loans to Bataan Polyethylene Corp. as the plant continues to remain inactive.

The IFC is the private sector investment arm of the World Bank. Polymax Worldwide, meanwhile, is allied with the locally-listed Metro Alliance group, which specializes in chemical production, distribution and logistics in the Philippines.

The IFC said the transaction would provide for a new project sponsor that would resume production and maintain employment of workers at the plant. The plant has not been in operation for sometime now.

"By achieving this goal, the IFC loan should benefit the future of the petrochemical industry and the economy of the Philippines," Vipul Bhagat, IFC country manager for the Philippines, said in a statement.

BPC was commissioned with the support of IFC’s financing in Aug. 2000. The total capital cost of the plant was $330 million.

The IFC pooled $178 million in loans from eight foreign banks while the $122 million came from equity infusion from BPC shareholders.

The foreign banks are the Development Bank of Singapore, Bank of Tokyo-Mitsubishi, Fuji Bank, Sumitomo Bank, ANZ Investment Bank, National Westminister Bank, Sakura Bank, and the Industrial Bank of Japan.

The BPC shareholders, meanwhile, are Bataan Holdings Corp., Petrolian Nasional Berhad of Malaysia, Sumitomo Corp. of Japan, and BP International Ltd. of the United Kingdom.

It was expected to operate a polyethylene facility in Bataan, with a capacity of 250,000 tons per year. But unfavorable market conditions forced BPC’s sponsors and shareholders to suspend operations soon after production began.

Aside from BPC, the IFC also has equity exposure in Banco de Oro Universal Bank, Planters Development Bank, and Manila Water Corp.

Since 1956, the IFC has committed more than $37 billion on its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries.