Telebras Update...
>Sunday June 7, 12:02 pm Eastern Time
>Brazil min sees sale of four Telebras units as key
>SAO PAULO, June 7 (Reuters) - Brazil's Communications Minister Luiz >Carlos Mendonca de Barros is pinning his hopes on the sale of four >units on Telebras (TEL_p.SA) (TBR - news) when the holding is >privatized in July, a local daily reported on Sunday.
>In an interview with Folha de Sao Paulo newspaper last week and >published on Sunday, Mendonca de Barros said the sale of three >wireline holding firms and one long-distance carrier was key to the >success of the auction, slated for July 29.
>Telebras was split into 12 units -- three wireline and eight >cellular phone holdings plus international carrier Embratel -- in >late May as a prelude to its sell-off.
>''The success of the sale will depend on the four -- Embratel, >Telesp, Tele Centro-Sul and Tele Norte-Nordeste-Leste -- since the >four represent 85 percent of the total value of Telebras,'' the >minister was quoted as saying.
>Telesp serves Sao Paulo state. Tele Centro-Sul covers several >central and Amazonian states plus the states of Parana and Santa >Catarina. Tele Norte-Nordeste-Leste serves five more Amazonian >states, Northeastern states and Bahia and Sergipe.
>''We hope to sell all of them, but if that's not possible, we will >not hand them over at just any price,'' he said.
>The government plans next week to release bid specifications for the >Telebras sale, including minimum prices for the 12 holdings.
>Asked for how much the minister would pay for Telebras, he said: >''I'll put my bid at the minimum price.''
>Referring to a report by Merrill Lynch, cited by Folha, that >Telebras may be valued at around $72 billion, Mendonca de Barros >said, ''Telebras shares are quoted at 125 reais or $110 on the local >bourses, which makes the holdings worth $37 billion in the market. >That means Merrill Lynch is calculating a 100 percent premium on the >sale,'' he said.
>Telebras' common shares closed at 103 reais last Friday, and its >preferred at 131 reais, up 0.98 percent and 1.55 percent >respectively.
>Mendonca de Barros also assured investors Telebras' privatization >contract will not change even if President Fernando Henrique Cardoso >is not re-elected in October.
>''There are no risks whatsoever since the rules are already >established,'' he said, adding it was a 25-year contract.
>His comments came amid last week's sharp fall in local stock prices, >including Telebras, triggered by a weekend poll that showed a >decline in popular support for President Cardoso.
>($1 equals 1.1521 reais)
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More Quotes and News: Telecomunicacoes Brasileiras SA (NYSE:TBR - news)
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