Embratel Maps Out Its Plans
For Listing ADRs on Big Board
Dow Jones Newswires
NEW YORK -- Brazilian long-distance carrier Embratel Participacoes SA expects to list its American depositary receipts jointly with 11 other companies spun off from Telecomunicacoes Brasileiras SA, a spokesman for Embratel's parent company said Wednesday.
On Tuesday, the U.S. Securities and Exchange Commission confirmed the registration of 11 Telebras spinoffs for listing on the New York Stock Exchange, with the exception of Embratel. The SEC didn't offer comments on the delay.
"We still expect to trade simultaneously with the rest of the [telecoms]," Manuel Wernicky, spokesman for MCI WorldCom Inc. said.
On the reasons for the delay, Mr. Wernicky said: "We had some earnings to announce and other details" that should be resolved in a matter of days. No date for the listing has been announced yet.
Analysts speculated that if Embratel weren't registered soon, the spinoffs could go ahead and list their ADRs. In that case, they said that Embratel, which the SEC considers the surviving entity after the Telebras spinoff, would trade as the residual.
In a statement on the Big Board listing, Embratel later said that because it is the surviving entity for U.S. accounting purposes, "its [SEC] filing process is necessarily more complex than that of the other Telebras companies."
This additional filing requirement is expected to conclude in the coming months. "In the future, Embratel will have no filing obligations with respect to Telebras," the statement said.
In addition to its more complex filing requirements, Embratel said its registration process "has been impacted by the company's detailed review of operating procedures and practices."
The review has resulted in "a number of operational and procedural practices designed to improve the ongoing performance of the company," including changes to the company's pension and medical plans, a voluntary personnel reduction, and an asset write-down for outdated and obsolete equipment.
"Management believes that Embratel will see benefits from the changes over the coming months and years," the release said.
Embratel is currently the single provider of long-distance service in Brazil, with the largest long-distance network in Latin America. The government plans to auction a license for a competitor company in January.
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