INTERVIEW - Itochu (TOKYO:8001) cautiously taps Brazil
Reuters, Thursday, August 06, 1998 at 22:00
By Noriko Yamaguchi
SAO PAULO, Aug 6 (Reuters) - Itochu Corp., one of Japan's
five biggest trading houses, said Thursday it was slowly
returning to Brazil after nearly two decades of absence in
Latin America's largest economy.
Itochu hoped to make up for the void by taking up a
minority stake in a Brazilian cellular phone company Tele
Sudeste Celular, which was sold off at Telebras' (SAO:TELB4)
privatization auction last week, Itochu Brasil SA president
Yasuyoshi Ota told Reuters.
Though vying for a minority share, Itochu, together with
NTT Mobile Communications, a cellular unit of Japan's giant NTT
Corp. (TOKYO:9432), were the only Asian contenders bidding at Latin
America's biggest selloff in history.
"We're kicking off with Telebras, and we already have a
string of other investment plans coming up," Ota said, without
elaborating.
Ota said Itochu barely invested at all in Brazil during the
1980s after suffering loan defaults and amassing heavy debts in
Latin America. It first set foot in Brazil in 1957.
But he added the South American country was now one of the
trading house's hottest area. "The whole company is now turning
to this region (Brazil) after the Asian crisis," he said.
Itochu and NTT Mobile joined a consortium led by Spain's
Telefnica (MADRID:TEF) to snap up Tele Sudeste Celular for 1.36
billion reais ($1.17 billion) on Wednesday.
The Japanese baffled local industry watchers when they
reduced their participation a day after the purchase to a
negligible amount. Itochu said it would announce in 10 days
what its final stake in the telecom would be.
The two had initially said that they would take up 8.5
percent and 5.5 percent stakes respectively, but then reported
to the Rio de Janeiro stock exchange that they would keep a
minimum 1,000 shares each.
An Itochu official had told Reuters after the auction the
final price tag on Tele Sudeste was way over what the company's
Japanese headquarters had in mind.
But Ota said on Thursday the move did not imply the
Japanese were clashing with Telefnica. "We have no qualms about
the price Telefnica offered to pay," he said.
Itochu was positive Tokyo would agree to renegotiate for a
bigger stake with Telefnica in the future, he said.
The company's Brazil investment last year, which was mainly
in auto imports and telephone infrastructure, totaled about $10
million. "This year could close with five or six times that
amount with Telebras' buy," he said.
Looking into the future, Itochu is also keen on Brazil's
energy and petroleum sector, Ota said.
The company last month announced it will develop oil in Rio
de Janeiro's offshore Campos Basin in a joint project with
Brazilian gas and oil giant Petrobras (SAO:PETR4) and another
Japanese trading house Mitsubishi Corp (TOKYO:8058).
"We're confident Brazil's our good bet over the next three
to five years although at first hand it doesn't seem like we're
investing a whole lot," Ota said.
noriko.yamaguchi@reuters.com))
Copyright 1998, Reuters News Service |
