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

To: Steve Fancy who wrote (6213)	7/31/1998 6:12:00 PM
From: Max Smith	Respond to of 22640

Latin Loot: Valuing Those Baby Bras By Peter Eavis Senior Writer 7/30/98 5:19 PM ET Numbers, numbers, numbers. That's all investors eager to play the Telebras (TBR:NYSE ADR) 12 are after. Few, if any, analysts have provided detailed valuations for each of the 12 companies broken out of the mighty Telebras. But if the flood of mail from TSC's readers is to be believed, the market wants to see some key investment yardsticks as soon as possible. Flemings' Valuations of the Baby Bras Enterprise Value to: Ebitda** Fixed-line($)* P/E ratio* Company '98 '99 '98 '99 '98 '99 Wireline Telesp 6.8 6.1 2,540 2,110 23 19 CentroSul 6.5 5.9 2,220 1,910 21 18 Norte Leste 6.0 5.5 1,920 1,660 21 18 Embratel 4.4 4.1 -- -- 10.9 10.3 Cellular Telesp 9.9 7.8 -- -- -- -- TeleSudeste 9.6 6.9 -- -- -- -- At the price target (see chart below). At the price target (see chart below), using ebitda, or earnings before interest, taxes, depreciation and amortization. Source: Flemings. The 12 Baby Bras have yet to issue American depositary receipts, but to try to satisfy the hunger for stats, we are publishing here estimates from William Laurent and Ronald Aitken, Latin telco analysts at Flemings, the U.K. brokerage. After surveying many brokers, Flemings seems to be the first out with specific valuation estimates for the four wireline companies -- Telesp, CentroSul, Norte Leste and long-distance Embratel -- as well as the two largest cellular firms, Telesp Cellular and TeleSudeste. Pricing the 'Baby Bras' Opening ADR price Flemings ADR price target Wireline Telesp $29.40 $35.30 CentroSul 17.90 21.50 Norte Leste 31.10 37.30 Embratel 15.00 18.00 Cellular Telesp $13.60 $16.30 TeleSudeste 6.90 6.20 *Flemings estimate if Telebras were trading around $130 when the new ADRs list. Telebras was at $125.56 at 1:30 EST on July 30. Source: Flemings.

To: Steve Fancy who wrote (6213)	7/31/1998 7:21:00 PM
From: Steve Fancy	Read Replies (1) \| Respond to of 22640

Telebras (NYSE:TBR) names Ronaldo Rangel as president Reuters, Friday, July 31, 1998 at 18:44 NEW YORK, July 31 (Reuters) - Brazilian telecommunications group Telebras S.A. said Friday it had named Ronaldo Rangel de Albuquerque as president of the company. Telebras, which was privatized two days ago in the largest auction in the country's history, said in a statement that Rangel would replace Fernando Xavier Ferreira as president. Rangel would also take over from Dalton Jose Ribeiro de Magalhaes as director of business, it said. The appointment was one of three changes made to its board of directors. Telebras said Minoru Oda would replace Haroldo Wangler Cruzeiro as vice president and Helio Marcos Machado Graciosa as director of research and development. Jonas de Oliveira Junio would replace Fred Marcos Zamagna Padilha as director of finance and investor relations and Geraldo Pereira de Araujo as director of network, it added. It did not elaborate and a spokeswoman for the company in New York could provide any details. On July 29, the country's government broke up Telebras into 12 companies and sold the controlling interest in each of them for a combined total of more than $18 billion. The American Depositary Receipt (ADR) in Telebras ended 3-8/16 lower at 121-1/16 on the New York Stock Exchange, while the new umbrella company for the 12 entities (NYSE:TBH) dropped 4-1/16 to close at 121-9/16. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (6213)	7/31/1998 7:22:00 PM
From: Steve Fancy	Read Replies (2) \| Respond to of 22640

What am I missing here? Why are we naming a new pres for TBR that doesn't exist any longer? sf

To: Steve Fancy who wrote (6213)	7/31/1998 7:24:00 PM
From: Steve Fancy	Respond to of 22640

U.S. telecoms to pursue Brazil's "mirror" licenses Reuters, Friday, July 31, 1998 at 19:05 By Jessica Hall NEW YORK, July 31 (Reuters) - U.S. telecommunications companies are expected to aggressively pursue licenses for companies that will compete against the recently-auctioned units of Telebras (SAO:TELB4) (NYSE:TBR), Brazil's huge telephone system, analysts said. "There will be a lot of interest. The competition will be fierce, even more fierce than in the auction, since some people will see this as their last chance to get into the market before it becomes too entrenched," said Jamila Xible, an international telecommunications analyst with the Yankee Group, a consulting firm. The Brazilian government on Wednesday raised $19 billion -- $5 billion more than expected -- during the privatization auction of the 12 Telebras units. Companies that failed to win a piece of Telebras during the auction can now apply for concessions to set up "mirror" companies to compete against the former Telebras operations. The Brazilian government plans later this year to sell licenses for a long-distance concession and three wired telephone concessions providing local service. MCI Communications Corp. (NASDAQ:MCIC), which bought Telebras' long distance and international unit Embratel, was the only U.S. telecommunications company to win a major stake in the auction. Some analysts said they had expected the U.S. telecoms to be more aggressive during the auction, but instead Spain's Telefonica de Espana SA (MADRID:TEF) was seen among the biggest victors. Analysts now expect U.S. companies BellSouth Corp. (NYSE:BLS) and Sprint Corp. (NYSE:FON), which lost out to higher bidders in the auction, to battle aggressively for the mirror licenses. "The companies that didn't win are kicking themselves, worried that they may have just missed the greatest growth opportunity that they've seen in a long time," said one analyst who declined to be named. Sprint may also try to join the consortium that won Telenorte, a fixed line company serving the north and northeastern areas of Brazil, Xible said. SBC Communications Inc. (NYSE:SBC), the Texas-based Baby Bell set to merge with Ameritech Corp. (NYSE:AIT), may also seek a mirror license, but its interest in Brazil is seen as more tepid than that of BellSouth or Sprint, analysts said. Sprint declined to comment specifically on Brazil but the company said it was always looking for growth opportunities. Sprint has a presence in Brazil through its international joint venture with Deutsche Telecom (FSE:DTEG) and France Telecom (SBF:FTE), called GlobalOne. The venture provides data services in 11 major cities. SBC also said it was always on the lookout for new opportunities. BellSouth spokesman John Price said the Atlanta-based Baby Bell will study the possibility of seeking a mirror license but declined further comment. "We will study it. We'll be looking at what the opportunities are," Price said. BellSouth also has an existing presence in Brazil. Last year, BellSouth and its partners won a license to provide cellular telephone service in Sao Paulo. BellSouth launched its wireless service in May and has quickly gained about 300,000 customers. It expects that number to grow to about 500,000 by the end of the summer. For the mirror licenses, the Brazilian government is going to consider many more factors than just price, analysts said. The govenment will look closely at the companies' commitment to the local community and ability to invest in infrastructure to ensure communications services are not limited to just the most wealthy and densely-populated areas, analysts said. "Commitment of the operator will be more of a factor than price," Xible said. Companies interested in a "mirror" concession must submit bids by November 3 and the board of ANATEL, Brazil's telecommunications watchdog, will ratify bidders in December. Copyright 1998, Reuters News Service