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Goldman Will Help WorldCom Sell Assets, People Say (Update3)
Thursday, June 27, 2002
(16:15)
By David Wells
Bloomberg

WorldCom often has hired Citigroup's Salomon Smith Barney unit for investment banking services. Salomon advised WorldCom on its unsuccessful $110 billion bid to acquire Sprint Corp. and was the lead or co-underwriter on 14 of its debt sales totaling $21.95 billion.

NEW YORK -- Bloomberg
Goldman Sachs Group Inc. will advise WorldCom Inc., struggling to repay more than $30 billion in debt, on its sale of long-distance telephone units in Mexico and Brazil, people familiar with the matter said.

WorldCom has said it may sell a 19 percent stake in Embratel Participacoes SA, Brazil's biggest long-distance carrier, and a 45 percent share of Mexico's second-largest long-distance company, Avantel SA.

The U.S. Securities and Exchange Commission yesterday charged WorldCom with fraud after it fabricated profits by hiding $3.9 billion of costs. To avert bankruptcy, the company is cutting costs and raising cash. WorldCom is exiting its wireless resale business and said Tuesday that it plans to sell ``certain South American assets.'' Analysts said the timing isn't right.

``Obviously this is the worst time to be selling phone assets in Latin America'' because the value of WorldCom's stake has declined and there's a dearth of potential buyers, said Patrick Comack, an analyst at Guzman & Co. who has a ``sell'' rating on WorldCom shares and doesn't own them.

WorldCom also may try to sell its MCI consumer long-distance operations, expected to generate about $8 billion in revenue this year, said Blake Bath, an analyst at Lehman Brothers Inc. who has dropped coverage of WorldCom shares.

Leveraged buyout firms may bid for MCI because of the amount of cash it generates, Bath said. He wasn't more specific about what firms may be interested.

WorldCom spokesman Brad Burns and Goldman spokeswoman Andrea Rachman declined to comment. CITI Valor Economico, a Brazilian newspaper, reported earlier today that WorldCom hired Goldman.

* Embratel, Avantel
* Hired Salomon
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Dan