Telmex bids for stake in Embratel

16 Dec 2003

Mexico’s largest telco, Telefonos de Mexico (Telmex) has revealed that it has placed a bid for WorldCom (MCI)’s majority stake in Brazilian long-distance service provider Embratel Participaçoes. The Mexican telco already has a presence in Brazil through mobile operator Claro and AT&T Latin America and is looking to expand its reach in the country. It faces competition for the 52% interest in Embratel, however; Brazilian telcos Tele Norte Leste Participaçoes, Telemar and Brasil Telecom Participaçoes have formed a consortium to bid for the stake, and Embratel’s pension fund Telos has also entered a proposal. MCI’s decision to sell its holding in the Brazilian telco comes as part of its reorganisation plan. It expects to emerge from Chapter 11 bankruptcy in early 2004, although it posted a net loss of USD194 million in October, down from the USD35 million loss recorded the previous month. The operator has put the widening loss down to higher expenses in the month.