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Strategies & Market Trends : Telebras (TBH) & Brazil -- Ignore unavailable to you. Want to Upgrade?

To: Steve Fancy who wrote (1546)	4/8/1998 6:09:00 PM
From: Steve Fancy	Respond to of 22640

Subject: Re: 26 wireless companies Date: Wed, 8 Apr 1998 18:02:16 -0300 From: "Lorival Souza da Silva"<lorival@telebras.com.br> To: smfmlf@centuryinter.net The names for the 26 cellular companies are as follows: Telesp Celular S.A., Telemig Celular S.A., Telerj Celular S.A., Telepar Celular S.A., Telebrasilia Celular S.A. etc. They have filed a registration statement at CVM (Brazilian SEC) and are awaiting for their approval and consequent listing at Brazilian bourses. You might find figures on the Predecessors Companies' Annual Reports. The pattern is: telepar.com.br I hope it helps you. Lorival Silva Investor Relations De: smfmlf @ centuryinter.net em 07/04/98 11:37 AST Favor Responder a smfmlf@centuryinter.net Para: Lorival Souza da Silva/Telebras cc: Assunto: 26 wireless companies Content-type: text/plain; charset˜-ascii Hello Lorival, Thank you for your time responding to my concerns. Can you tell me what the names of the 26 newly formed wireless companies are, and whether or not they are actively trading. Is there anywhere on the web that I might find closing figures for these companies? Thank you, Steve Fancy <smfmlf@centuryinter.net>

To: Steve Fancy who wrote (1546)	4/8/1998 11:58:00 PM
From: jeremy smith	Read Replies (3) \| Respond to of 22640

Steve, the advantage of the new locally listed "receipt" is that it allows current holders to BUY TIME. Note that this only affects LOCAL investors...not applicable to ADRs. If you are an institutional holder of TBR, and have your performance measured vs the Bovespa index, then right now you are in a tight spot. With TBR accounting for nearly 1/2 the value of the index, you run a big risk by NOT having exposure...you would actually be "short" the market. At the same time, you are painfully aware that the day is coming when you will need to surrender your precious TBR for 12 separate securities...some of which will be good, and some of which would best be described as toxic waste, and totally illiquid. As a mutual fund, you might even find that some of this toxic waste simply does not meet your basic investment criteria (ie market cap/ liquidity etc)...in other words, you probably will not even be ALLOWED to hold some of this stuff. In this situation, the last thing you want is to be forced to offload the radioactive stuff on day one. SO......anwer is, you exchange TODAY your TBR for the new receipt. You can then pick and choose the best moment in the future ( maybe long after the split up) to sell out your receipt, and buy in to the precise combination of subs that you have targeted. It buys you time, and takes away the immediate pressure. As an aside, you guys should all be aware that the split up process will be SEQUENTIAL, and NOT SIMULTANEOUS. What do I mean by this? I mean that you are NOT going to exchange your TBR for 12 separate stocks in a single day - at least, that's what both I and my firm adamantly maintain. The first sub to be spun off will be TELESP. I would thus expect that upon the TELESP sale, TBR holders will have their shares exchanged for 2 new ones. One share representing your interest in TELESP, and one being your interest in the combined 11 remaining subs. Upon sale number 2, you'll then exchange your "new" TBR share for 2 fresh ones...one being Telenorte (or whatever has just been sold) and one being the balance of 10 companies combined. In short, this will be a PIECE BY PIECE process...and not a ONE OFF exchange. This is actually good news, in that TELESP (the 1st on the block) represents the choicest asset. So....you will be able to keep your TBR right until sale date, then collect your 2 new shares (1 x Telesp + 1 x TBR remnant), and immediately dump the TBR remnant.....which although it will suffer in price, will at least still be very liquid. I hope all this makes sense. Let me know if not. Cheers, J.