BCI Subsidiary Canbras Communications Corp. Signs Agreements for the Sale of All its Broadband Communications Operations in Brazil

BCI to Vote in Favour of Transactions, Subject to Court Approval




International Inc. (“BCI”) today announced that its subsidiary, Canbras

Communications Corp. (“Canbras”) has entered into definitive agreements

for the sale of all of its broadband communications operations in

Brazil. These transactions include an agreement with Horizon Cablevision

do Brasil S.A. (“Horizon”) under which Canbras has agreed to sell to

Horizon all of the equity capital of the subsidiary though which Canbras

holds substantially all of its interests in its broadband subsidiaries

operating in the Greater Sao Paulo area, including all of its interest

in its core subsidiary Canbras TVA Cabo Ltda. Total gross proceeds to

Canbras from the sale to Horizon are $32.6 million, of which $22.2

million will be paid in cash on closing of the transaction and $10.4

million will be paid in the form of a one year note bearing interest at

10% per year. The amount of the note is subject to reduction in the

event indemnification obligations of Canbras arise under the terms of

its agreement with Horizon. In related transactions, Canbras has agreed

to sell to Cia. Tecnica de Engenharia Eletrica (“Alusa”) its cable

television subsidiaries operating in Parana State, in consideration for

the assumption of all liabilities of such subsidiaries by Alusa. The

closing of these transactions, which will take place concurrently, is

expected in the fourth quarter of 2003.

Canbras’ sale transactions are subject to a number of conditions,

including the obtaining of all required regulatory approvals in Brazil

and other third-party approvals. The transactions are also subject to

the approval of the shareholders of Canbras. In connection with such

shareholder approval, BCI has undertaken to enter into a voting

agreement (the “Voting Agreement”) with Horizon pursuant to which BCI

will vote all Canbras shares owned or controlled by it in favour of the

Horizon sale transaction, subject to approval of the Voting Agreement by

the Ontario Superior Court of Justice (the “Court”) pursuant to BCI’s

Plan of Arrangement.

Canbras has agreed with Horizon to call and hold a special meeting of

Canbras shareholders within 60 days after BCI has obtained Court

approval of the Voting Agreement. At the special meeting, Canbras will

seek shareholder approval, by “special resolution” (passed by a majority

of not less than two-thirds of the votes cast by shareholders voting at

the meeting), for the sale transactions, which constitute a sale of all

or substantially all of the assets of Canbras. At the special meeting,

Canbras will also be seeking shareholder approval, by special

resolution, for its winding up and dissolution following the final

distribution by Canbras of the net proceeds of the sale transactions to

the Canbras shareholders.

Canbras anticipates being able to distribute a portion of the net

cash proceeds to its shareholders, including BCI, as promptly as

practicable following the closing of the transactions, and that a final

distribution of net proceeds will be made by Canbras to its shareholders

in one or more instalments following its receipt of the balance of the

purchase price payable by Horizon under the one-year promissory note and

the satisfaction of all of its liabilities.

BCI owns a 75.6% interest in Canbras and controls 76.6% of the

outstanding Canbras shares. The carrying value of BCI’s investment in

Canbras at June 30, 2003 was $15 million. BCI expects to receive its

proportionate share of the net proceeds to be distributed by Canbras,

currently estimated to be approximately $21 million assuming the full

repayment of the one year note.

BCI is operating under a court supervised Plan of Arrangement,

pursuant to which BCI intends to monetize its assets in an orderly

fashion and resolve outstanding claims against it in an expeditious

manner with the ultimate objective of distributing the net proceeds to

its shareholders and dissolving the company. BCI is listed on the

Toronto Stock Exchange under the symbol BI and on the NASDAQ National

Market under the symbol BCICF. Visit our Web site at www.bci.ca.

Certain statements made in this press release describing BCI’s

intentions, expectations or predictions are forward-looking and are

subject to important risks and uncertainties. The results or events

predicted in these statements may differ materially from actual results

or events. For additional information with respect to risk factors

relevant to BCI, see the reports on Forms 6-K and 40-F filed by BCI with

the United States Securities and Exchange Commission, as well as the

Annual Information Form filed with Canadian securities commissions. BCI

disclaims any intention or obligation to update or revise any

forward-looking statements, whether as a result of new information,

future events or otherwise.


Bell Canada International Inc.
Howard N. Hendrick, 514-392-2260