Embratel to buy Vesper?

5 Aug 2003

Brazilian long-distance telco Embratel has revealed it is in talks to buy Vesper, the mirror local and intra-regional long-distance licensee in regions I and III, from its majority owner Qualcomm. Using a CDMA network capable of supporting over two million customers, Vesper specialises in offering low cost fixed wireless services. In November 2001 San Diego-based Qualcomm agreed to provide USD266 million in equity financing to Vesper; the commitment was made concurrently with an equity investment of USD80 million by Velocom, an existing Vesper shareholder. The transaction made Qualcomm Vesper’s largest shareholder, with a 74% stake. As Qualcomm also has a 49.4% holding in Velcom, which in turn owns 24% of Vesper, Qualcomm’s total stake in the company rises to 86%. Morgan Stanley has been appointed by Qualcomm to advise on the sale.