Brazil’s federal development bank BNDES has awarded the contract for valuation, suggestion of minimum price and restructuring for privatization of national telecoms network Telebras, due to take place later this year. The consortium chosen was Brasilcom, led by US investment bank Salomon Brothers in association with Morgan Stanley. Telebras comprises 27 regional companies (one for each state in Brazil) plus long-distance and international carrier Embratel, and is estimated to be worth as much as US$30bn. In parallel, a consortium led by US consultancies Arthur D. Little and Coopers & Lybrand is carrying out a valuation for comparison with the Brasilcom estimate. The 27 state phone companies are to be grouped into three larger entities for privatization, while Embratel will be sold off separately. All the state companies’ mobile operations, meanwhile, are to be separated out and regrouped into nine regional cellular operators, also for sale to the private sector. Concessions will later be granted for private-sector competitors to each of the privatized companies.
