BellSouth Plans LatAm IPO, Eyes Expansion

FORT LAUDERDALE, FLA. (03/30/2000) - U.S. carrier BellSouth Corp. is bullish about its Latin America business and plans to expand its operations in the region, the company said yesterday in documents filed with the U.S. Securities and Exchange Commission (SEC).

The company's Latin America Group has operations in 10 countries, where it mostly offers wireless telephony services, and plans to increase its offerings in those countries, as well as expand to other nations in the region.

"We believe there are considerable opportunities for long-term growth of the Latin America Group's wireless telecommunications businesses in their existing markets. ... We seek to further develop the Latin America Group's position ... through expansion into new geographical markets," BellSouth said in a proxy statement filed with the SEC.

The proxy statement is related to a registration also filed yesterday by BellSouth with the SEC about the company's plans to launch an initial public offering (IPO) of a tracking stock for its Latin America operations.

The money raised through the IPO -- the company's goal is US$1 billion -- would be used to strengthen BellSouth's Latin America operations, the company said.

Morgan Stanley Dean Witter and Goldman Sachs & Co. have been named as lead underwriters.

BellSouth owns part or all of a number of wireless carriers in 10 Latin American countries: Argentina, Brazil, Chile, Ecuador, Guatemala, Nicaragua, Panama, Perú, Uruguay and Venezuela. It already has a license to operate in Guatemala, and has identified Colombia, El Salvador, Honduras and Costa Rica as countries where it would like to set up shop, according to the statement.

For fiscal year 1999, ended November 30, 1999, the Latin America Group had operating revenues of $2.4 billion, operating income before depreciation and amortization expense (EBITDA) of $556 million and a net loss of $316 million.

Revenue in fiscal year 1998 was $1.9 billion.

The Latin America Group's operating companies taken as a whole generated $3.4 billion in revenue and operating income before EBITDA of $762 million. Because BellSouth doesn't own 100 percent of each of these companies, its cut of the total revenue was $2.4 billion. The companies have a total of about 12,000 employees.

These companies grew their combined customer base 78.3 percent in fiscal year 1999 to 6.2 million customers, compared with fiscal year 1998, according to the proxy statement.

Although the core business of these companies is wireless telephony, some of them also provide other services, such as Internet access. BellSouth wants to continue expanding these companies' services into high-growth areas, like Internet access, data transmission and long-distance services. Part of the company's strategy is to build an international network to interconnect the networks of its operating companies.

"This will enable the ... operating companies to offer international long distance services, Internet access and transport and end-to-end managed data services," according to the proxy statement.

BellSouth, based in Atlanta, is at 1-404-249-2000 or at http://www.bellsouth.com/.

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