Norwest Corporation and Subsidiaries - Page 41

                                        -41-                                          
         was $115 million. PCC intended to finance this expansion with a $55          
         million loan from the Brazilian National Development Bank, a $30             
         million loan from IFC, and $30 million from internally generated             
         cash flow.                                                                   
               On November 19, 1986, PCC acquired 80 percent of Bates' stock,         
         one of its principal Brazilian competitors. The purchase price was           
         approximately $9 million.  The Bates acquisition enabled PCC to              
         expand its capacity in the multiwall-paper-bag market.                       
                   2.  Petitioner's Internal Analysis of a PCC Investment             
              At the request of NBM's International Department, Norwest               
         Corporate Finance27 evaluated IFC's 28.7-percent equity interest in          
         PCC at the beginning of 1987. The evaluation resulted in a February          
         1987 study (Corporate Finance study). At this time, NBM was                  
         contemplating the acquisition of IFC's entire 28.7-percent interest.         
              Norwest Corporate Finance reviewed the forecast prepared by             
         PCC's management and found it reasonable, based on the available             
         information.  It found that the projected level of sales and                 
         profitability from the planned increase in capacity was reasonable           
         and concluded that PCC was not underperforming in comparison with            
         its Brazilian competitors.                                                   
              The Corporate Finance study used both the market and income             
         approaches to value IFC's interest in PCC. The market approach               


               27   Norwest Corporate Finance was responsible for the                 
          corporation's policies with regard to the deployment of its                 
          assets and liabilities.                                                     




Page:  Previous  31  32  33  34  35  36  37  38  39  40  41  42  43  44  45  46  47  48  49  50  Next

Last modified: May 25, 2011