El Paso Corp. (ticker: EP, exchange: New York Stock Exchange (.N))
News Release -
VeloCom Receives Strategic Investment From El Paso Energy Communications Company: Deal Represents Convergence of Wireless Broadband and Fiber-Optic Technology In Latin America
DENVER, April 25, 2000-VeloCom Inc., an
international broadband communications company, today announced that El Paso
Energy Communications Company, a wholly owned subsidiary of El Paso Energy
Corporation (NYSE: EPG) of Houston, has made a $50 million investment in return
for a minority interest in VeloCom. This investment will give El Paso Energy
Communications a presence in the international telecommunications market as well
as a seat on VeloCom's Board. VeloCom will use the proceeds to continue the
development of its broadband networks in Argentina and Brazil. Closing was
completed on April 20, 2000.
VeloCom gains a strategic partner with El Paso Energy
Communications' investment. Their operational expertise in infrastructure
development and El Paso Energy Corporation's ongoing commitment to South
America will enhance the ability of VeloCom's subsidiaries in Argentina and
Brazil to deploy networks with full broadband capability.
VeloCom was formed in 1998 with the goal of becoming the
leading provider of fixed telephony and data services to major markets in Latin
America. Economic growth and the evolution of wireless technology paved the way
for VeloCom to provide data transmission, Internet access, and voice services to
this region. VeloCom and its Vesper partners, Bell Canada International and
Qualcomm Inc., have designed and developed a fixed wireless telephony system in
Brazil and will use their exclusive duopoly license to compete against the
incumbent local telephone operators.
"This investment demonstrates the convergence between
the telecom and energy industries," said Michael Quinn, chief corporate
development officer for VeloCom. "And it is being executed for the first
time in Latin America by VeloCom."
"We believe that our investment in VeloCom offers an
excellent opportunity to expand our services in Brazil and Argentina as well as
other Latin American countries where we already have a significant presence in
the energy arena," said William A. Wise, president and CEO of El Paso
Energy Corporation. "This reflects our commitment to developing our U.S.
assets for telecommunications and exemplifies our strategy of working with
"This is a terrific fit for us," said David
Leonard, president and CEO of VeloCom. "We can integrate our broadband
wireless access with their infrastructure development capability and ultimately
transmit digitally formatted data and video, from point to multi-point."
About El Paso Energy Communications
El Paso Energy Communications is developing a state-of-the-art
telecommunications network along key segments of El Paso Energy's U.S.
coast-to-coast natural gas pipeline system as well as analyzing opportunities in
international investment in areas with existing energy infrastructure. El Paso
Energy Corporation provides comprehensive energy solutions through its strategic
business units, which hold over $16 billion dollars in assets. The company owns
North America's largest natural gas pipeline system, both in terms of
throughput and miles of pipeline, and has operations in natural gas
transmission, merchant energy services, power generation, international project
development, gas gathering and processing, and gas and oil production. On
January 18, 2000 El Paso Energy announced that it has agreed to merge with The
Coastal Corporation in a deal valued at $16 billion, including approximately $6 billion of assumed debt and preferred equity. Visit El Paso Energy's web site at
About VeloCom Inc.
Denver-based VeloCom is emerging as a leading provider of competitive voice,
data and Internet services in key markets in Latin America. Privately held,
VeloCom was formed in June 1998 under the name WLL International Inc. Fred
Vierra, chairman; David Leonard, CEO and president; and Nick Kauser, acting
chief technical officer, lead VeloCom. Visit VeloCom's Web site at