Armstrong Tyres

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 Armstrong ZE Pvt. Ltd. (“Armstrong ZE” or “the Company”), plans to develop a greenfield tyre manufacturing plant in Pakistan at an estimated cost of US$92 million (mn) with an annual production capacity of 1.4 million radial “Armstrong” brand tyres (the “Project). The Company is equally owned by Pakistan’s Hussain and Yusufzai families (collectively the “Sponsors”).  The Project will be located at Gharo-Keti Bunder Highway (N110), Gharo, District Thatta, Sindh approximately 26 km southeast of Karachi in a Special Economic Zone. The Special Economic Zone is in a predominantly agricultural region. The Company has acquired 50 acres of land, of which 16 acres have been converted into an industrial/ commercial zone through an urban planning process. The remaining 34 acres will be used for building accommodations for workers, administration buildings, offices, and parking areas. The Company received the permit for project construction and have started with the construction of worker accommodations.  The Sponsors started tyre distribution in Pakistan, through the establishment of a local tyre distributor Zafar Enterprises (“ZE”) and subsequently, expanded internationally. In 1993, the Sponsors established Zafco Group Holding (“Zafco” or “Guarantor”) in the UAE, which is a global importer/exporter of tyres, batteries, and lubricants with a current presence in more than 85 countries.  IFC is considering a senior A-Loan of up to US$25 mn to partially fund the Project (the “IFC Loan”). In addition to the IFC Loan, the project will be funded through equity from the Sponsors and a local currency parallel loan from a consortium of local lenders.