Brazil To Open Bankers' Bids For Telebras Privatization On Monday
Dow Jones Online News, Wednesday, February 11, 1998 at 17:07
RIO DE JANEIRO -(Dow Jones)- Brazil's National Development Bank on Monday will open commercial bids from investment banks vying to be in charge of privatizing telecommunications holding company Telecomunicacoes Brasileiras SA, known as Telebras, a spokeswoman for the bank said Wednesday.
The opening of the bids will be made possible because Telebrasil 2000, one of the three competing consortia, withdrew a complaint it had filed last week against another competitor, the spokeswoman said.
Telebrasil 2000 is led by Brazil's Banco FonteCindam SA and also includes Kleinwort Benson Limited, Lehman Brothers Inc. and Deutsche Bank's (DTBKY) Brazilian subsidiary. The group had complained that Brasilcom - a group led by Salomon Brothers Inc. that also includes Morgan Stanley, Dean Witter, Discover & Co. (MWD) - failed to meet a tender requirement.
Development bank officials said at the time that the complaint would postpone the opening of commercial bids to Feb. 27.
The technical proposals presented by the consortia gave an early lead to Telebrasil, a consortium including U.S. investment bank Merrill Lynch & Co. (MER). Telebrasil won a perfect 10 for its technical proposal, which carries a 70% weight in the final outcome of the bidding.
Also part of the Merrill Lynch group are NM Rothschild & Sons Ltd.; Credit Suisse First Boston Corp.; ABN Amro Bank NV; and Brazil-based Banco Graphus SA and Metal Data Engenharia e Representacoes Ltda. Metal Data, a consulting firm, leads the consortium.
Telebrasil 2000 received the second-best grade: 9.4819. Brasilcom came in third with 8.6528.
Brazilian government officials have said they expect to privatize Telebras (TBR) by July, in what will be Latin America's largest privatization to date.
The government's 21% stake in Telebras is estimated to be worth between 20 billion reals and 30 billion reals ($17.76 billion and $26.64 billion).
-By Geraldo Samor; 55-21-580-9394
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