OUTROS DESTAQUES
Capitalization
Net takes road show to London, USA
quinta-feira, 25 de julho de 2002 , 18h26 | POR REDAÇÃO

Net Serviços de Comunicação (ex-Globo Cabo) completed the Brazilian leg of its road show with a presentation on the capitalization process in São Paulo Monday. CEO Luiz Antônio Viana and CFO Leonardo Pereira now go to London and several cities in the United States. The equity market could hardly have given them a worse send-off: Net?s stock lost more than 16% on Nasdaq and almost 20% on the São Paulo Stock Exchange (Bovespa). Analysts blamed the turbulence caused by WorldCom?s collapse and uncertainty about Net?s own future. Net isn?t announcing detailed plans because it fears committing itself to a vigorous growth strategy without adequate visibility of the economic and financial outlook. However, inquiries made by PAY-TV News suggest Messrs. Viana and Pereira are planning bolder action than the points revealed in the road show. Here are the main points:

* Asset disposals, programming changes – Net has already announced its intention of divesting in areas considered unprofitable. CEO Viana is personally heading the effort to sell some of these operations. Programming is also set for changes. Dollar contracts will be reviewed and denominated in local currency. Director Marco Aurélio Ferreira has been told to review packaging strategy. The priority is to abandon homogeneity and ensure the right products are offered in the right locations. Two points need clarification in this regard. The MSO?s new shareholder agreement mysteriously states that if Sky ceases to be a franchisee of Net Brasil, Net (ex-Globo Cabo) may also terminate its contract. And the capitalization prospectus includes among the business risks of the deal the fact that if Globopar ceases to be Net?s controlling shareholder (as it probably will), exclusivity for Globosat programming will no longer be guaranteed.

* Digitization – Selective network digitization during the next two years will be financed by suppliers so as not to affect Net?s cashflow. The first area to be digitized will be Leblon in downtown Rio de Janeiro. Net is finalizing negotiations with Motorola and Scientific Atlanta. Both have offered to supply set-tops for less than 100 US dollars each. Vírtua, the broadband Internet service, will be relaunched at the end of July but won?t be marketed as a cheaper service than ADSL-based competitors. The idea is to highlight the superior quality of Vírtua, for which it?s worth paying a small premium.

* World Bank backing – Once the capitalization is completed, Net plans to issue 240 million reals in bonds with the backing of the World Bank?s corporate finance arm, the IFC, which has already authorized the transaction. The issue will go ahead when the capital market calms down. CEO Luiz Antônio Viana doesn?t believe the potency of Brazil?s broadcasters represents a special obstacle to increased penetration for pay TV. The key problem is maldistribution of income, which prevents lower-income households from becoming subscribers. Mr Viana therefore has no plans to ?popularize? Net. On the contrary, the strategy is to build revenue and acquire more upper- and middle-income subscribers. This strengthens the idea of multiplexing broadcast TV and leveraging file material, especially when available for DVD windows and pay-per-view.

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