2 items From todays WSJ and Dow Jones:
International:
Big Board Is Seen Listing Telebras 'Babies'
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Uncertainty Shadowing 12-Way Split May Be Easing
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By Pamela Druckerman
Staff Reporter of The Wall Street Journal
One of the clouds hovering over the privatization of Brazilian telecommunications giant Telebras appears to be lifting.
Officials say that the 12 stocks to be formed when Telecomunicacoes Brasileiras SA is fully privatized later this year are likely to get full New York Stock Exchange listings, bucking concern that some of the smaller companies would trade as partially listed shares, which have less liquidity and lower disclosure requirements.
Georges Ugeux, head of international activities at the New York Stock Exchange, said the exchange is working with Telebras and the Brazilian government with the intention of giving full listings to all 12 companies.
"Since we've had the privilege of trading the whole company, we're very keen to give investors access to the new group of companies, with the same level of transparency and quality of trading that they had in Telebras," Mr. Ugeux said.
The Brazilian government is planning to sell its remaining 21.5% stake in Telebras, the holding company for Brazil's state telecommunications system, to private companies later this year. Telebras will be split into 12 separate companies, each of which will have its own stock. Current Telebras shareholders will receive shares in all 12 companies.
The news on listings mostly affects the cellular-phone companies that are set to break off from Telebras. Some of the smaller or newer companies, including several in Brazil's northern states, weren't expected to qualify for full listings, since they haven't met U.S. accounting and disclosure standards for three years, an NYSE requirement, said Jose Linares, Latin telecommunications analyst at Societe Generale Securities Inc.
Mr. Ugeux said the Big Board is willing to accept accounting for companies that have only met U.S. requirements for two years, as it did when listing Deutsche Telekom AG in 1996. Stocks for Telebras's regional phone companies, which will trade under the names Telesp, Telenorte and Telesul, plus long-distance company Embratel, had been expected to get full NYSE listings.
Telebras certainly has room to throw its weight around. With $79 billion in trades, it was the third most actively traded stock on the NYSE last year, trailing IBM Corp. and Compaq Computer Corp., and was the top-traded foreign stock.
Uncertainty about the Telebras sale and concern that weakness in Japan and other Asian markets would spill into Latin America have pushed down Telebras's share price to close at $121.75 Friday, down $4.125, or 3.3%, for the day, from a yearly high of $135 on March 23. "If all of the companies get listed as ADRs [American depositary receipts], so much the better, but we're not really expecting it, therefore it's not in the market as such," said Rizwan Ali, an analyst at Bear, Stearns & Co.
A full listing should be good news for the new shares. Mr. Linares estimates that without a full listing, the Telebras spinoffs would trade 10% to 15% below where they would trade as fully listed shares. He noted that common shares of Telebras, which are listed in Sao Paulo but not in New York, currently trade at a similar discount to the company's preferred shares, which have a full NYSE listing.
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Matt Moffett in Rio de Janeiro contributed to this article
ITEM II
Brazil's Telebras May Trade As One Unit After Spinoffs>TBR
RIO DE JANEIRO (Dow Jones)--Shares of Brazil's telecommunications giant, Telecomunicacoes Brasileires SA (TBR), or Telebras, "in principle" will continue trading as a single unit after the company undergoes a major spinoff that will eventually result in 12 different companies, the Sao Paulo Stock Exchange, or Bovespa, said Monday in a news release.
Seeking to calm down jittery investors, Bovespa put out a joint statement with Telebras reflecting the major conclusions of a Friday meeting between exchange and company officials.
The statement said that "in principle, (officials) accepted a Bovespa request to have Telebras shares - after the spinoff and until the new companies begin trading - ... continue trading as a single trading unit ("com").
The statement said all Telebras spinoffs will be listed in a stock exchange, but it didn't elaborate on whether that would apply to both the Bovespa and the New York Stock Exchange.
All spinoffs will begin trading simultaneously, the statement said, without specifying a date.
The statement also denied rumors that Telebras would be extinct at the end of April.
Rumors about that extinction - as well as investors' fears that the 12 spinoffs won't be as liquid as the stock - led to a Telebras selloff late last week.
Friday's meeting was attended by Telebras president Fernando Xavier Ferreira, and market-relations director Fred Padilha. Also attending were Ercio Zilli, special adviser to the communications ministry and Luiz Octavio Magalhaes, representing Banco de Investimento Patrimonio, the adviser to the government.
Patrimonio is 50% owned by Salomon Smith Barney.
Telebras officials are to meet Monday with New York Stock Exchange officials. -By Geraldo Samor; 55-21-580-9394; gsamor@ap.org |
