5.CDC has existed since 1948. It is a statutory corporation sponsored by the Department for International Development (“DFID”). The Corporation is the Government’s main instrument for directly mobilising investment in developing countries (not confined to the Commonwealth), particularly the poorer economies. It now has an investment portfolio that totalled £1.56 billion at the close of 1997, with around 80% of the portfolio in countries with a GNP/per capita of less than US$1,600. CDC finances from its own resources some £300 million of new investment each year. The Corporation’s activities cover investments in a wide range of sectors including infrastructure, agri-business, manufacturing and financial services. As well as making investments alongside other investors, CDC also has a portfolio of businesses majority-owned and managed by CDC.
6.In October 1997 the Prime Minister announced that the Government proposed that CDC would be transformed into a Public/Private Partnership. The principal reason for this is to facilitate the introduction of private capital into CDC. Under the Partnership proposals, CDC will have the status of a plc and the majority of its shares will be held by private investors. There will be a transitional period between the creation of the share capital and eventual sale of the majority shareholding during which time CDC will continue to be wholly Government-owned. Timing of the sale will be determined at a later date, taking account of how the market views both CDC and pre-emerging market conditions at the time when the Partnership is created.
Background