PT WOM/BII

completed

The project consists of an equity participation of up to $22 million in PT. Wahana Ottomitra Multiartha (WOM), an Indonesian consumer finance company focusing on motorcycle financing. WOM, established in 1982, is the third largest motorcycle finance in Indonesia with Indonesia now being the world’s third largest motorcycle market after China and India. IFC’s equity participation will represent 20% of the total share capital of WOM. The transaction is subject to Bank Indonesia and other regulatory approvals. Bank Internasional Indonesia (BII) has signed a conditional sale and purchase agreement (CSPA) to purchase up to 75% of WOM for approximately $82.5 million or about 2.2 times WOM’s book value as of December 31, 2004. However, under Bank Indonesia (BI) regulations, a bank can only use up to 10% of capital (Tier I & Tier II) for investment. As a result, BII is expected to take only around 43% of WOM at this time. To address this issue and to bring strong partners to this transaction, BII has asked IFC to purchase 20% of WOM, with DEG taking the remaining 12% (subject to DEG’s internal approvals). The sponsor of the project, BII, will have an option to purchase the WOM shares from IFC and DEG over a 5 year period, subject to BII’s Legal Lending Limit and BII has agreed to an exit mechanism related to the IFC equity investment in WOM. The terms of the exit mechanism are being negotiated. The entire project involving BII, IFC and DEG is subject to Bank Indonesia approval. Also the proposed purchase of WOM is subject to approval by BII’s shareholder’s at BII’s Annual General Meeting to be held at the end of March, 2005.