Scanntech

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The project involves a proposed subscription by IFC of $10 million in preferred convertible stock in the holding company of Scanntech (or the “Company) to implement the Company’s project (estimated to cost $45 million) to expand its technology platform solution to small and medium independent grocery stores in South America. Scanntech installs cash register equipment, directly via its own technicians or via third-party technicians, who personally visit stores and provide training to the stores’ employees on the use of Scanntech’s equipment. Payments are collected by Scanntech electronically. Scanntech leases small office spaces for administration and sales in Montevideo (Uruguay), Sao Paulo (Brazil), and Buenos Aires (Argentina). The Company also maintains servers in the central telephone company of Uruguay. Scanntech also leases a small engineering and call center as well as a warehouse facility in Montevideo (Uruguay) and a small storage unit (of less than 200 square meters) in Buenos Aires (Argentina), while warehousing and logistics in Brazil will be performed by a subsidiary of Federal Express. There are no plans for additional office space or warehousing in the next 5 years. Scanntech fully designs its main product, the iPos, in Uruguay, and contracts its manufacture to a company in China. Scanntech purchases all other components (bar code scanner, cash drawer) off-the-shelf, and no alterations are done to these products. In 2013, Scanntech commissioned the manufacture of 5,000 units of its iPos unit from Nanjing Malata Technology Co. Ltd. in Fujian, China. Scanntech expects that the number of iPos units that it orders will increase significantly in each of the coming three years, and Scanntech will be considering the potential selection of a new manufacturer, either to replace or to complement its contract with Nanjing Malata Technology Co. Ltd.