UBP Csepol Iron Foundry Kft

In two guarantee contracts MIGA insured UBP, a wholly owned subsidiary of Universal Automotive Industries, Inc., of the United States for its equity and shareholder loan investments in UBP Csepal Iron Foundry Kft. MIGA coverage of $3.2 million was issued against the risks of currency transfer, expropriation, and war and civil disturbance.

UBP acquired the financially distressed Csepal iron foundry, a major steel manufacturing and fabrication plant for more than a century. UBP will modernize and expand the plant, which will produce gray iron and ductile castings for automobile spare parts and machine tools. Automated molding machinery will be introduced for the manufacture of brake rotors, mostly for export to Canada, the United States, and Western Europe, generating export earnings of about $10 million annually.

In addition to improving the plant's production and operations, major rehabilitation of the foundry also will mitigate some environmental impacts. The existing emissions control system will be refurbished, filters and wet scrubbers will be installed to control dust, and the resulting sludge will be neutralized and then disposed of at government-operated landfill. The project will preserve current jobs and create new jobs for an additional 100 nationals. Local managers and other staff will be trained in the United States.