ASHBURN, Va. -- MCI (WCOEQ, MCWEQ) and Telefonos de Mexico, S.A. de C.V. (BMV: TELMEX; NYSE: TMX; NASDAQ: TFONY; LATIBEX: XTMXL) have entered into a definitive agreement to sell MCI's investment in Embratel Participacoes (NYSE: EMT; BOVESPA: EBTP3, EBTP4) to Telefonos de Mexico (TELMEX) for $360 million in cash. Completion of the sale is subject to approval by the U.S. Bankruptcy Court and Brazilian regulatory authorities with filings to antitrust and securities authorities. The TELMEX offer was approved by both the MCI Board of Directors and the Official Committee of Unsecured Creditors.

The investment in Embratel is a 19.26 percent economic interest and a 51.79 percent voting interest. The sale of MCI's investment in Embratel will have no impact on MCI's customers in Brazil, whose service from Embratel will continue as usual. "MCI will have an ongoing relationship with Embratel, enabling us to continue to provide our Brazilian customers with the highest quality services," said Jonathan Crane, MCI executive vice president and chief strategy officer. "Through Embratel, and ultimately, TELMEX, MCI will have the opportunity to deploy new technologies and services to more business customers in South America."

"Brazil is South America's largest economy and Embratel is among Brazil's most highly respected and competitively-driven telecommunications companies," said Jose Formoso, executive vice president of TELMEX international operations. "This combination presented extremely attractive opportunities to TELMEX - to establish our presence in a growing market and to work alongside Embratel to continue building upon the solid business and service reputation they have established in Brazil. We look forward to a successful partnership with Embratel and its employees."

MCI