Nevertheless# at year’s end there was practically no considerable reserve available to continue the expansion program, specially as the second share of US$ 3OOOOOO of Series C Debentures, – which was foreseen to be issued in 1962, – was irlaced already in 1961, to replace the US$ 4t000?
NECESSITIES FOR 1962 AND FINANCING PROGRAM a) A v a i 1 a b 1 e F u n ds _#————————- For the current year, an investment of Soles 480’000*000 includ- ing capitalized interests, has been foreseen for expansion works, financing, i
jq4,eou The balance of the funds required for 1961 was corered by an inter- mediary financing put at disposal by associated cokpanies. II. e.: Huinco 286’O’tooot Marca I 56tIQQ*QIQ Marca II 6t000’ooo Turbo-gas unit IV 2310001000 Distribution system 7 0tOOO1OOO 44110001000 Capitalized interests 39f00O000 480T0001000 (approx. Self-financing Re-investment of the Companyts own funds for an amount of approx- imately Soles 4510002000 ( UsS 116671000 ). This self-financing may be considered as already secured, because a resolution by the National Tariff Commission authorizimgan electric- ity rate increase of about 20 % is expected by the end of April. -4
World Bank Loan According to the building programm, the proceedings from this loan during 1962 for payments of electromechanical equipment, construct- tion material, services in foreign currency etc. Hidrandinats contribution Pursuant to Loan Agreement IB 260 PE, the Company may count with Hidrandinals cash surplus, which in 1962 will amount to about Soles 1510001000, i. In order to solve this problem, the Company is presently negotiating with a group of Swiss banks; at the same time, close con- tacts are maintained with the First Boston Corporation,’New York, for a possible placement of debentures in the United States, As these two financing .jpg)
operations – described below -, depend from the balancing of the Company’s economic situation by the impending eleo. Intermediary financing The following intermediary financing, amounting to US$ 21800000 has already been granted us: Swiss Bank Corp.
Financing by a group of Swiss banks Negotiations with the Swiss Bank Corporation have already given some solid results, as this institution accepted the task of raising a sum of about Sw
Due to the fact that formalities for such an issue in Switzerland need quite a period of time and could last till the end of 1962, the Swiss Bank Corporation is willing to consider an intermediary financing at an interest rate not over 6 %, which could be put at our disposal to- wards the end of June 1962, as soon as the tariff problem is solved, if the general political situation after the elections remains normal. Possibilities of placement of debentures in the United States. The Company is in close contact with the First Boston Corporation, New York, in view of the possibility of a direct placement of US$ 4 to 5 million, at 7 % interest, for 15 years, with some chosen North- American insurance companies and mutual funds.
. rantee the very best co-ordination, as it may eventually help to solve some of the financing problems for the first part of 1963, tooo 4, Increase of the Companyts capital stock It is foreseen to issue new shares for an amount of approximately Soles 30tOOO1OO0 towards the end of 1962 (possibly October), Together with the issue of Soles 6 5 t000t000 of free shares decided by the last Ex- traordinary General Meeting of Shareholders, as a consequence of the revaluation of the Companyt s assets, this new issue ought to maintain a fairly acceptable balance between “Debt and Equity”. The Companyts shareholders will have an option for the underwriting of this new issue of Soles 30t1Q0Qp, and the balance will be placed on the Peruvian market. In view of the favorable attitude of the lo” cal investors towards our securities, which are presently quoted above pair, we have reasons to believe that such an issue will have very fair chances of success.
