Indo Rama Synthetics (India) Ltd. - Underwriting of GDR and Rights Issue

completed

SUMMARY OF PROJECT INFORMATIONProject Name India-Indo Rama Synthetics (India) Ltd.Region AsiaSector ManufacturingProject No 004609Projected Board Date March 1, 1996Company Name Indo Rama Synthetics (India) LtdTechnical Partner and/or Major Shareholders Indo Rama Synthetics India Limited belongs to the well established Lohia Group based in Indonesia.  The Group is a major player in the polyester and yarns business. The main technical partners are DUPONT, U.S.A. and TOYOBO, Japan.Description of Location Nagpur, Maharashtra - IndiaProject Cost and Proposed IFC Investment Project cost is estimated at US$351 million.  IFC proposes to:(a) Underwrite up to US$10 million, i.e. 20% of the Company''s proposed   GDR offering of around US$50 million; and (b) Subscribe to its proportionate entitlement of Shares up to US$2.1 million in the Company''s forth coming Rights Issue.  IFC is expected to act as the Joint Lead Manager for the proposed GDR issue.Description of Company and Purpose of Project The project involves the setting up of an additional polyester capacity of 168,000 MT per annum at its existing plant in Nagpur. The expansion would increase the Company''s total polyester capacity to 237,000 MT per annum.  The project would be implemented in two phases.  Phase I would be commissioned by July 1996 and Phase II by January 1997. With this expansion, the Company will be well placed to become a major player in this dynamic sector of the Indian economy, which is expected to have considerable growth prospects given the country''s growing population, improving standards of living and restricted growth prospects for natural fibers.  The expansion would have a significant developmental impact and provide economic benefits to the country through large scale employment as well as foreign exchange earnings, since a substantial part of the output would be exported.  IFC is expected to play a significant role in the project.  Its participation as a Joint Lead Manager would strengthen the marketability of the Company''s GDR offering, given the currently depressed market for Indian equity.Environmental Category and Issues This is Category B project according to IFC''s environment review procedure.  Environmental, health and safety issues associated with this project include liquid effluents, air emissions, work place noise and air and worker safety.  The Sponsor has presented plans to address these issues and demonstrate the project will comply with applicable governmental and World Bank requirements. Environment clearance has been given to this project and the Environmental Review Summary is available from the Public Information Center.Date SPI sent to PIC: December 8, 1994 Revised:  February 20, 1996For additional Information contact:  Corporate Relations Unit - telephone:(202) 473-7711 - facsimile:  (202) 676-0365.Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).