SAO PAULO, Brazil--(BUSINESS WIRE)--July 1, 2002--
*T - 6 -
TELESP CELULAR PARTICIPACOES S.A.
Rua Abilio Soares, 409, Sao Paulo, SP
A Public Company
CVM No. 1771-0
C.N.P.J. No. 02,558,074/0001-73
NOTICE TO SHAREHOLDERS
Notice is hereby given to Shareholders that the Company, in
compliance with applicable legal and statutory provisions, and within
the limits of its authorized capital, will increase its corporate
capital from R$ 1,873,346,716.53 (one billion, eight hundred and
seventy-three million, three hundred and forty-six thousand, seven
hundred and sixteen reais and fifty-three cents), to R$
4,370,304,746.74 (four billion, three hundred and seventy million,
three hundred and four thousand, seven hundred and forty-six reais and
seventy-four cents) by means of a private subscription of shares, with
the issue of 713,416,580,060 (seven hundred and thirteen billion, four
hundred and sixteen million, five hundred and eighty thousand and
sixty) new shares, being 249,244,868,259 (two hundred and forty-nine
billion, two hundred and forty-four million, eight hundred and
sixty-eight thousand and two hundred and fifty-nine) common shares and
464,171,711,801 (four hundred and sixty-four billion, one hundred and
seventy one million, seven hundred and eleven thousand and eight
hundred and one) preferred shares, equal to currently existing shares,
by means of a private subscription of shares, pursuant to preemptive
rights, in accordance with the first paragraph of article 171 of Law
No. 6,404 of December 15, 1976, and latter amendments ("Corporate
Law"). The period for exercising preemptive rights for the
subscription of new shares by shareholders holding shares on July 8,
2002 begins as of July 12, 2002 in the Brazilian market, and the
period for exercising preemptive rights for the subscription of new
American Depositary Receipts - ADRs, representing preferred shares of
the Company, by holders of ADRs on July 11, 2002 begins as of July 17,
2002 in the U.S. market, pursuant to the following conditions:
I. - AMOUNT OF CAPITAL INCREASE
1.1. - R$ 2,496,958,030.21 (two billion, four hundred and
ninety-six million, nine hundred and fifty-eight thousand, thirty
reais and twenty-one cents).
II. - AMOUNT AND TYPE OF SHARES TO BE ISSUED
2.1. - 249,244,868,259 (two hundred and forty-nine billion, two
hundred and forty-four million, eight hundred and sixty-eight thousand
and two hundred and fifty-nine) common shares with no par value.
2.2. - 464,171,711,801 (four hundred and sixty-four billion, one
hundred and seventy-one million, seven hundred and eleven thousand and
eight hundred and one) preferred shares with no par value, in
preferred shares or ADRs form.
III. - RECORD DATE AND SUBSCRIPTION RATIO
3.1. - Shareholders holding shares of the Company will have the
right to subscribe for 1.55642832 (one point five five six four two
eight three two) new common shares per each 1 (one) common share held
on July 8, 2002.
3.2. - Shareholders holding shares of the Company will have the
right to subscribe for 1.55642832 (one point five five six four two
eight three two) new preferred shares per each 1 (one) preferred share
held on July 8, 2002.
3.3. - Holders of ADRs representing preferred shares of the
Company will have the right to subscribe for 1.55642832 (one point
five five six four two eight three two) new ADRs per each 1 (one) ADR
held on July 11, 2002.
IV. - EX-RIGHTS SALE
4.1. - The shares or ADRs acquired on or after July 9, 2002 and
July 12, 2002, respectively, will be ex-rights of subscription to the
V. - SUBSCRIPTION OF SHARES AND RIGHTS ASSIGNMENT BULLETIN
5.1. - The holders of shares of the Company in Brazil may request
to a securities broker the subscription of new shares or may complete
the respective subscription bulletin which may be requested at any
branch of Banco ABN Amro Real S.A., financial institution depositary
for the book-entry shares of the Company, in a term of 34
(thirty-four) days beginning on July 12, 2002.
5.2. - Holders of shares or ADRs wishing to trade their preemptive
rights during the period of exercise of preemptive rights may do so,
and the Brazilian shareholders must request the rights assignment
bulletin, which will be issued by Banco ABN Amro Real S.A., the
financial institution depositary for the book-entry shares, or
instruct their securities broker to conduct trades directly on the
5.3. - Once the rights assignment bulletin is issued, and provided
the sale takes place, the corresponding statement at the back of the
rights assignment bulletin with the assignor's signature, certified at
a notary's office, will be required.
5.4. - Shareholders must indicate their interest in reserving the
remaining shares at the corresponding subscription bulletin.
5.5. - Holders of ADRs:
5.5.1 - The shares will be registered pursuant to the U.S.
Securities Act of 1933 and may be offered or sold in the
United States of America or to U.S. citizens in accordance
with the terms of this Notice.
5.5.2 - Further information for holders of the Company's ADRs
can be found in Form F-3 filed on July 1, 2002 with the
Securities and Exchange Commission in the United States of
America, a copy of which may be requested from The Bank of
New York. A translation of Form F-3 was submitted to the
Comissao de Valores Mobiliarios (the Brazilian Securities
and Exchange Commission) in order to update the Company's
registry, and a copy of such document will be available to
interested parties at the Company's headquarters.
VI. - ISSUE PRICE
6.1. - The issue price will be R$ 3.50 (three reais and fifty
cents) per lot of one thousand shares, for both types of shares of the
6.2. - In accordance with article 170, paragraph 1st, of the
Corporate Law and CVM Guidance Opinion No. 1 of September 27, 1978,
the trading price of the shares at Bolsa de Valores do Estado de Sao
Paulo ("Bovespa") was used to determine the issue price of the new
shares to be issued by the Company, because of its high liquidity
(alto indice de negociabilidade).
6.3. - The issue price was set at a discount to its trading level
in order to support the Company<180>s objectives related to this offer
while taking into account current market conditions. This discount is
aimed to provide an incentive to shareholders to participate in the
offer and to provide for the necessary conditions for the pricing of
the preemptive rights.
6.4. - The issue price represents a discount of approximately 20%
(twenty percent) to the closing sale price of the Company's preferred
shares and 9% (nine per cent) to the closing sale price of the
Company's common shares traded at Bovespa on June 27, 2002, and a
discount of approximately 30% (thirty percent) to the last 30 trading
days weighted average of the Bovespa closing price weighted by
transaction volumes of the Company's preferred shares and
approximately 23% (twenty three percent) to the last 30 trading days
weighted average of the Bovespa closing price weighted by transaction
volumes of the Company's common shares.
VII. - DIVIDENDS
7.1. - The shares to be issued following the homologation of the
capital increase by a Board of Directors' Meeting will entitle
shareholders to receive full dividends related to the fiscal year
beginning on January 1, 2002.
VIII. - PERIOD FOR EXERCISING PREEMPTIVE RIGHTS
In the Brazilian market:
Beginning on July 12, 2002 and ending on August 14, 2002
In the U.S. market:
Beginning on July 17, 2002 and ending on August 7, 2002
IX. - FORM OF PAYMENT
9.1. - The payment will be made in cash, upon subscription.
However, the total amount of R$ 96,958,030.21 (ninety six million,
nine hundred and fifty-eight thousand, thirty reais and twenty-one
cents) will be paid-up with a credit, on behalf of the shareholder
Portelcom Participacoes S.A. ("Portelcom"), corresponding to a tax
benefit which accrued in 1999, 2000 and 2001, as a result of a premium
paid by Portelcom in the Telebras System privatization. Under
Instruction No. 319, dated December 3, 1999, of the Brazilian
Securities Commission, and according to article 170 of the Corporate
Law, minority shareholders will be granted preemptive rights, with
respect to shares issued to Portelcom, as result of the tax benefit
accrued by the Company.
X. - REOFFERING OF UNSUBSCRIBED SHARES
10.1. - Upon expiration of the period for exercising preemptive
rights, shareholders who have indicated interest in purchasing
additional shares will have the opportunity to subscribe for new
shares, during 3 (three) days after the quantifying of the total
number of unsubscribed shares, to be determined by Banco ABN Amro Real
S.A. following the preemptive rights expiration date, in the Brazilian
market as well as in the U.S. market, to subscribe for new shares. The
maximum number of shares or ADRs that each subscriber will be entitled
to subscribe will be equal to the total number of unsubscribed shares
and ADRs multiplied by a percentage determined by dividing the number
of shares or ADRs subscribed by the respective subscriber by the total
number of shares and ADRs subscribed upon exercise of the preemptive
10.2. - Following the expiration of the first reoffering round, if
any shares or ADRs remain unsubscribed, they will be reoffered in a
second reoffering round to the subscribers that exercised their
preemptive rights in the first reoffering round and indicated an
interest in purchasing additional shares or ADRs in a second
reoffering round. The shareholders will have the opportunity to
subscribed for new shares, during 3 (three) days after the quantifying
of the total number of unsubscribed shares in the first reoffering, to
be determined by Banco ABN Amro Real S.A. following the preemptive
rights expiration date, in the Brazilian market as well as in the U.S.
market, to subscribe for new shares, in accordance with the procedure
described in item 10.1 above for the calculation of the number of
shares or ADRs that each subscriber will be entitled to subscribe,
provided that the maximum number of shares or ADRs which each
subscriber will be entitled to subscribe will be determined according
to the result of the first reoffering round.
10.3. - If any preferred shares remain unsubscribed following the
expiration of the second reoffering round, the Executive Board of the
Company may decide, as authorized by the Board of Directors, whether
to conduct a public auction at the Sao Paulo Stock Exchange, for the
benefit of the Company (article 171, paragraph 7th, "b" of the
Corporate Law, article 4th, VII, "b" of Instruction CVM No. 13/80 and
article 2nd, V of Instruction CVM No. 168/91), or whether to conduct
additional reoffering rounds, according to the procedures described
XI. - REQUIRED DOCUMENTATION FOR SHARE SUBSCRIPTION AND RIGHTS
11.1. - Individuals: Identity Card (RG), Tax Roll Number (CPF) and
evidence of address.
11.2. - Legal Entity: Articles of Association or By-Laws and the
Minutes of the Meeting that elected the incumbent managers, duly filed
at the qualified body of the Departamento Nacional do Registro de
Comercio (Federal Department of Boards of Trade) and evidence of
11.3. - In case of proxy representation, the presentation of the
XII. - FURTHER INFORMATION AND ASSISTANCE
12.1. - Further information and assistance can be requested at the
securities brokers and at the branches of Banco ABN Amro Real S.A.
XIII. - PERIOD FOR DELIVERING OF THE SHARES
13.1. - The shares issued will be delivered up to 2 (two) business
days after the approval of the homologation of the capital increase,
at Banco ABN Amro Real S.A.
Sao Paulo, June 28, 2002
TELESP CELULAR PARTICIPACOES, S.A.
Maria Paula de Almeida Martins Canais
Director of Investor Relations
Phone number: 55 (11) 3059-7081
A registration statement relating to these securities has been
filed with the Securities and Exchange Commission but has not yet
become effective. These securities may not be sold nor may offers to
buy be accepted prior to the time the registration statement becomes
effective. This communication shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of
these securities in any State in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of any such State.
Any public offering of securities of the Company in the United
States will be made by means of a written prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as amended,
that may be obtained from the Company at Rua Abilio Soares, 409,
04005-001 Sao Paulo, Brazil or from the information agent, D.F. King &
Co., Inc. at 77 Water Street, New York, New York 10005.
CONTACT: Telesp Celular Participacoes S.A.
KEYWORD: BRAZIL INTERNATIONAL LATIN AMERICA
INDUSTRY KEYWORD: TELECOMMUNICATIONS
SOURCE: Telesp Celular Participacoes S.A.