Mexico to Sell 20% of Phone Firm Before ’91

MEXICO CITY â€”  The government plans to sell a 20.4% stake in the national telephone company by Dec. 20, the first stage in Mexico’s largest privatization effort, newspapers reported Tuesday.

The current value of Telefonos de Mexico shares is more than $8 billion. About half are held by the government, which would give up control of the company with its sale of the 20.4% stake.

The reports quoted the ministry of finance and the Banco Internacional, financial agent for the sale, as saying that while foreign investors could participate, control of the company would remain in Mexican hands.

The daily newspaper El Financiero quoted officials as saying that the government intended to sell 10.4% to Mexicans and 10% to foreign investors.

The finance ministry said the price for the 20.4% stake would be between $1.4 billion and $1.8 billion.

It said that, within a year, the government would sell all of its shares, which are valued at more than $4 billion.

El Financiero said foreign interest is coming from the former Bell System companies US West and Southwestern Bell, Telefonia Espanola, Bell Canada, Britain’s Cable and Wireless and France Telephone.

The reports said Banco Internacional plans to announce terms of the auction between Aug. 13 and Sept. 7, as well as principles for qualifying purchasers.

They said the bank planned to make the cutoff date for bids Nov. 15. Winning bidders would be notified and payment of guarantees arranged between Dec. 4 and Dec. 20.

Banco Internacional said the sale would be designed to ensure Mexican control, to guarantee the rights of workers, to improve service, encourage continued growth and strengthen technological investment.