Opportunity offers Previ equity swap to resolve dispute

The Opportunity Group, via CVC/Opportunity Equity Partners Administradora de Recursos Ltda., has offered to swap its ?indirect? holding in Telemar for Previ?s investment in the holding companies that control Brasil Telecom, Telemig Celular and Amazônia Celular. Opportunity submitted the proposal to Banco do Brasil?s pension fund on Thursday, April 24, and the telcos involved published ads explaining the offer in major newspapers on the same day. Opportunity stipulated that the assets involved will first have to be valued and any difference found will be offset by the advantaged party. If Previ accepts the offer it will be an important move toward resolving the two-year dispute with Opportunity, much of it involving litigation. TELETIME News failed to obtain comment from Opportunity, while Previ said it hadn?t had time to study the offer in detail.
Acceptance by Previ would apparently entail the unwinding of equity cross-ownership by both parties, thereby sorting out two problems: Previ would get back its holding in Telemar, from which it was forcibly removed by Anatel in September 2000 because it already had a large stake in Brasil Telecom; and Opportunity would abandon plans to return to Telemar, having been forced out at around the same time because Anatel deemed illegal its acquisition of a stake in Inepar.
In the same week as the telcos published their announcement of Opportunity?s offer, a cover story in Carta Capital (www.cartacapital.com.br) signed by Teletime journalists Rubens Glasberg and Samuel Possebon shows how Previ?s investments in telecoms (worth almost 2 billion Brazilian Reals today) were direly jeopardized after the departure of TWI do Brasil by its involvement with Opportunity, as well as developments that followed the privatization of Telebras and have yet to be clarified.

Previ Chairman Sérgio Rosa is quoted as saying he wants to sell the fund?s holdings in telecoms ?on competitive terms?, with the opportunity to choose the buyer and determine the price. In other words, he won?t agree to sell only to Opportunity.
This month?s issue of Teletime magazine has an editorial on the post-privatization process and the threat of a cartel in fixed-line telephony that resulted in all these disputes. The issue also includes previously unpublished information regarding Anatel?s decision on the Telemar case.