Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes _______ No ___X____
MATERIAL FACT
TELE CELULAR SUL PARTICIPAÇÕES S.A.
CNPJ/MF
n° 02.558.115/0001-21
NIRE n° 4130001760-3
Companhia
Aberta
TELE NORDESTE CELULAR
PARTICIPAÇÕES S.A.
CNPJ/MF n° 02.558.156/0001-18
NIRE
n° 2630001109-3
Companhia Aberta
TELE NORDESTE CELULAR PARTICIPAÇÕES S.A. (“TND”) and TELE CELULAR SUL PARTICIPAÇÕES S.A. (“TSU”), both controlled by TIM BRASIL SERVIÇOS E PARTICIPAÇÕES S.A., hereby, pursuant to the provisions in Law n°6404/76, art. 157, § 4, and CVM Instruction n° 358/02, as amended by CVM Instruction n° 369/02, inform their shareholders, the market in general and any other interested parties, of the following Material Fact:
1. On May 31, 2004, the Boards of Directors of TND and TSU authorized the execution of an Agreement and Justification of Merger, under which TND will be merged into TSU. As a consequence thereof and after the fulfillment of all conditions herein mentioned, (i) TND shall cease to exist and its shareholders shall receive shares of TSU and (ii) TIM Nordeste Telecomunicações S.A., which is currently controlled by TND, shall then be controlled by TSU, jointly with the other currently controlled company of TSU, TIM Sul S.A. The purpose of the above mentioned merger basically is to reduce the administrative costs required to maintain the two companies’ separate corporate structures, and to concentrate the liquidity of the shares issued by TND and TSU.
2. Since the merger of TND into TSU must be previously registered with the United States’ securities regulatory authority, the Securities and Exchange Commission (“SEC”), the Board of Directors of TSU has also authorized the application for that registration, which will be communicated to SEC within the next few days.
3. Banco ABN-AMRO Real S.A., a financial institution with head office at Av. Paulista n° 1374, 16th floor, Centro, São Paulo, State of São Paulo, registered with CNPJ/MF Corporate Taxpayer Roll under n°33.066.408/0001-15, has already prepared, at the request of TSU and TND, an economic appraisal report of TND and TSU, based on the discounted cash flow criterion as of March 31, 2004.
4. Based on the aforementioned appraisal report the management of TSU and TND agreed upon the exchange ratios of TND shares for TSU shares and of TND American Depositary Shares (“ADS’s”) for TSU ADSs, presented below which falls within the value range defined in the appraisal by Banco ABN AMRO Real S.A.:
| SHARES / ADSs HELD BY SHAREHOLDER / ADS HOLDER OF MERGED COMPANY (TND) |
TYPE AND NUMBER OF SHARES / ADSs ISSUED BY TSU TO BE RECEIVED (PER SHARE / ADS OF TND) |
| 1 (one) COMMON share of TND | 0.9261 COMMON SHARES |
| 1 (one ) PREFERRED SHARE of TND | 0.9261 PREFERRED SHARES |
| 1 (one) ADS of TND | 1.8522 ADSs (1) |
It is relevant to point out that the equity and political rights of common shares issued by TSU are the same as those of the common shares of TND. Similarly, the equity and political rights of preferred shares of TSU are the same as those of the preferred shares of TND.
5. The exchange ratios provided for in item 4 herein may be modified by TSU and TND, should any material event occur which has a relevant impact on the economic, financial and/or operational conditions of TSU and/or TND.
6. All other appraisals required to implement the merger (appraisal based on the net book value and book value adjusted to market prices) will be executed in the month of July 2004 by ACAL Consultoria e Auditoria S.S., and based on the results thereof on the basis date of June 30, 2004, other material terms for the merger will be established, such as, for instance, the value of the TSU capital increase resulting from the merger of TND and the value of TND’s common shareholders’ right to withdraw. The persons acquiring common shares of TND after the publication date of this Material Fact notice shall not be entitled to the right of withdrawal, as provided for under art. 137, § 1, of Law no. 6404/76.
7. The preferred shareholders of TND will have no right to withdraw, since (i) the preferred shares of TND are part of the IBOVESPA index and (ii) over 50% (fifty percent) of the preferred shares of TND are floating, that is to say, they are not held by the controlling shareholder or persons related thereto, in compliance with liquidity and dispersion criteria (subsections “a” and “b” of item II of art. 137 of Law n° 6404/76). The shareholders of TSU (surviving entity) shall not be entitled to the right to withdrawal, insofar as only the shareholders of the merged company are entitled to said right.
8. As soon as all the appraisals referenced in item 6 above have been completed, the Boards of Directors of TND and TSU will review a final draft of the Agreement and Justification of Merger executed on May 31, 2004. If those Boards of Directors approve the final draft, a new notice of Material Fact will be published, pursuant to Instruction CVM n° 319/99, containing all the information required for the deliberation on the captioned merger. Similarly, Special Shareholders’ Meetings of TND and TSU will be called to review the final draft of the Agreement and Justification of Merger and all other aspects of the merger.
9. The Agreement and Justification of Merger, as currently drafted, and the economic appraisal report prepared by Banco ABN-AMRO Real S.A. will be available for consultation by the shareholders of TND and TSU at the head offices of TND and TSU indicated hereunder. Similarly, a translation of the F-4 form will also be available for consultation, as of the date of its submittal to the SEC.
| COMPANY | ADDRESS |
| TELE NORDESTE CELULAR PARTICIPAÇÕES S.A. | Av. Ayrton Senna da Silva n° 1.633, Jaboatão dos Guararapes, Pernambuco |
| TELE CELULAR SUL PARTICIPAÇÕES S.A. | Rua Comendador Araújo n° 299, 3° andar, Curitiba, Paraná |
10. The captioned merger will be subject, among other conditions: (i) to the completion of the appraisal reports referenced in item 6 above; (ii) to the approval and execution of a final draft of the Agreement and Justification of Merger executed on May 31, 2004; (iii) to the publication of a notice of Material Fact, with all the details required under CVM Instruction n° 319/99; (iv) to the calling of a Special Shareholders’ Meetings of TND and TSU to deliberate on the transaction; (v) to the registration and declaration of the effectiveness of the F-4 form, to be expeditiously filed with SEC, and (vi) to the approval of the transaction by the shareholders representing the majority of the voting capital of TND and TSU, in Special Shareholders’ Meetings.
11. The transaction shall be informed to the National Telecommunications Agency– ANATEL for regulatory purposes.
12. The merger is expected to be concluded within the upcoming months, during the second half of 2004. A new Material Fact notice (item 10 (iii) above), as well as the convening of the respective Shareholders’ General Meetings of TND and TSU, which shall decide on the merger (item 10 (iv) above) will be timely published. Below is a list of the main planed steps regarding the transaction referred herein:
NEXT STEPS
Filing of F-4 Form with SEC.
Preparation of special balance sheet as of 06/30/04.
Meeting of the Boards of Directors of TND and TSU to authorize the signature of the final version of the protocol and justification of merger and to convene the Special Shareholders’ Meetings of TND and TSU which shall decide on the Merger.
Meeting of the Audit Committees of TND and TSU to render an opinion on the Merger transaction.
Publication of Material Fact Notice including the remaining information on the merger, as provided for in CVM Instruction 319/99 (increase of TSU’s capital stock, value of the right of withdrawal, etc.).
Publication of the summons notice for the Special Shareholders’ Meetings of TND and TSU, which shall decide on the Merger.
Declaration of Effectiveness of Form F-4 issued by SEC.
Special Shareholders’ Meetings of TND and TSU to decide on the Merger.
Publication of the minutes of the Special Shareholders’ Meetings of TND and TSU, which decided on the merger (beginning of the term for exercising the right to withdraw by the common shareholders of TND).
End of the term for exercising the right to withdraw by the common shareholders of TND.
Jaboatão dos Guararapes e Curitiba, May 31, 2004
Walmir Urbano Kesseli
Head
of Investor Relations
TELE NORDESTE CELULAR PARTICIPAÇÕES
S.A.
Paulo Roberto Cruz Cozza
Head
of Investor Relations
TELE CELULAR SUL PARTICIPAÇÕES
S.A.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| TELE CELULAR SUL PARTICIPACTES, S.A. | ||
| Date: May 31, 2004 | By: | /s/ Paulo Roberto Cruz Cozza |
| Name: Paulo Roberto Cruz Cozza | ||
| Title: Chief Financial Officer | ||