FiberCore forms South African Joint Venture

CHARLTON, Mass., Feb. 5 -- FiberCore Inc. has entered into a joint venture with the Industrial Development Corp (IDC) of South Africa, a quasi governmental agency, and local investors to build a manufacturing facility for single-mode fiber in Cape Town, South Africa.

The joint venture, FiberCore Africa, is a $28 million project, consisting of approximately $17 million in equity and $11 million in loans. For its contribution of technology and approximately $1.7 million in cash, FiberCore will have a 60-percent equity interest, with rights to purchase the remaining 40 percent between 2004 and 2006. FiberCore will make its investment during the course of the construction of the facility with funds received from its recently announced financing. Several other participants, led by the IDC of South Africa, will contribute approximately $7 million for a 40-percent equity interest in the joint venture. (This is a Rand-based transaction, so all US dollar figures are approximate.)

To complete the funding of the project, FiberCore Africa closed on an approximately $11 million bank facility with a consortium of lenders, comprised of the IDC of South Africa, PSG Investment Bank Ltd. and BOE Bank Ltd. In addition, the joint venture is eligible to receive tax and other benefits with an estimated current value of approximately $18 million, spread over the next few years.