Brazils TVA Expects Majority Sale by June

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Sao Paulo, Brazil -- At least five potential bidders for a
majority stake in Brazilian pay TV operator TVA have started due diligence on the company,
with a sale expected to occur by June, TVA president José Augusto Pinto Moreira said.

Though he declined to identify the companies, Moreira said
they are international groups with interests in telecommunications and related sectors.
"We want to turn TVA into a provider of several services, so we are looking for a
partner with knowhow in telephony and other telecommunications services," he said.

Industry sources speculated on a number of potential
buyers. Topping the list is Spanish telecommunications heavyweight Telefónica S.A., which
owns the fixed-telephony concession in Brazil's largest city, Sao Paulo. It could
create potential operating synergies in that market by linking its telephone network with
TVA's cable plant. Starting in 2002, telephone and cable companies will be able to
offer a full range of broadband services, effectively making them head-to-head
competitors.

Canadian telco Bell Canada Inc., which is partnered with
TVA in Brazilian MSO Canbrás, is also thought to be interested in buying TVA. Portugal
Telecom S.A., which controls Sao Paulo mobile-phone operator Telesp Celular S.A., was
also mentioned.

Another name to crop up was Hicks, Muse, Tate & Furst
Inc., the Dallas-based private-investment company. In Brazil, it owns a stake in upstart
MSO TV Cidade.

While Telefónica is considered the most likely buyer,
there is also speculation it may choose to do something with Brazil's leading MSO and
TVA rival Globo Cabo S.A., which boasts about 1 million subscribers. An agreement with
Globo Cabo would quash any potential pact with TVA, which has 356,000 cable and
wireless-cable subscribers.

The rumored buyers could not be reached for comment. In any
case, Moreira said the companies that TVA has talked with are bound by confidentiality
agreements.

TVA, majority-owned by Brazilian publishing giant Grupo
Abril, has been on the auction block for more than a year. It is widely known that the
company's U.S.-based minority partners -- Hearst Corp., ABC Inc., Falcon
International Communications and Chase Manhattan International Finance Ltd. -- have wanted
to unload their stakes for some time. Those plans were put on hold amid the 1999
devaluation of Brazil's currency and the ensuing recession.

Moreira was brought in to TVA from Abril, where he is vice
chairman, to restructure the company and seek out new investors.

Any new partner in TVA is expected to buy out the U.S.
investors, plus some of the position held by Abril, which wants to relinquish its position
as majority owner.

In its 1999 financial results released last week, TVA said
net revenue increased by 2 percent to $114 million, while cash flow rose to $32 million
from $11 million. Debt fell to $116 million in December, down from $ 306 million last
June, after TVA sold its stake in direct-to-home platform Galaxy Brazil.

TVA has also pared its programming investments and now owns
just one network, Eurochannel.

TVA also said subscriber churn fell to 26 percent from 46
percent over the course of 1999.

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