The invitation to bid for the state telecommunications companies was made available to the public on June 12 1998. For the auction, set for July 29 1998, the companies have been re-structured into three groups:
Group A, with a total minimum price of about US$ 9.2 billion, consisting of three companies holding the 26 regional fixed telephone service companies and Embratel (long distance);
Group B, with a total minimum price of about US$ 1.55 billion, consisting of the four mobile phone companies (band A), situated in the southern region of the country; and
Group C, with a total minimum price of about US$ 910 million, consisting of four mobile telephone (band A) companies located in the northern regions of the country.
Under Decree 2.617 of June 5 1998, if foreign capital acquires control of any company holding telephone concessions, then the foreign capital control must be exercised through a company established in accordance with Brazilian law and with domicile and administration in Brazil.
There are no further restrictions on foreign capital participation.
The pre-qualification of participants in the auction will take place from June 30 to July 20 1998.
Law 9648 of May 27 1998 allows for the restructuring of the Federal electricity company Eletrobrás and its subsidiaries for their privatization.
Constitutional Amendment 13 of August 21 1996 triggered the end of more than 55 years of monopoly of the reinsurance sector by the Brazilian Institute of Reinsurance (IRB). It is, however, still pending further regulation. The government has now started preparations for the sale of all of its participation in IRB´s social capital and control. The insurance sector is still waiting for a definitive date for IRB´s privatization, scheduled by the National Bank of Economic and Social Development (BNDES) to the second semester of this year.