Long distance
Analysts now doubt whether WorldCom will sell Embratel
quinta-feira, 19 de setembro de 2002 , 20h34 | POR REDAÇÃO

Embratel stock has made significant gains in the local market over the last 60 days on the back of expectations that WorldCom will sell the long-distance carrier. Analysts are now less sure, but their doubts should soon be dispelled one way or the other. In a few weeks? time, WorldCom will announce global restructuring plans specifying operations considered unprofitable and hence disposable. On Monday, September 16, WorldCom denied any plan to sell off subsidiaries outside the U.S. and promised positive cashflow in 2003. A telecoms analyst interviewed by Teletime News wasn?t impressed. ?Embratel is very probably one of the operations that will generate that cashflow,? he said, adding that investors worry about such a scenario because it means Embratel could become a cash cow rather than receiving capex funding from the parent company. A private equity fund manager cited by the Financial Times is gloomy, saying WorldCom has indeed tried to sell offshore assets but no one is interested. These doubts and the impact of currency depreciation on Embratel?s dollar debt have taken their toll on the stock. The preferred share (PN) closed down 2.14% on 2.29 BRL Tuesday, September 17. The voting share (ON) closed down 1.96% on 3.00 BRL. The month-to-date loss is now more than 18%.


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