The company set to challenge Cable & Wireless for Bermuda's telecommunications business has the backing of a major US investment bank, it has been revealed.

Oppenheimer & Co. Inc., the US investment bank, broker and money manager, owns the largest stake in Island newcomer TeleBermuda International Ltd.

The investment bank holds 588,000 of TeleBermuda's 3,487,916 shares, or about 17 percent, through three investment funds. Holdings are as of March 14, 1997.

"The economic opportunity looks extremely good, and there is good management, and good regulation to foster growth of a competitor,'' Oppenheimer senior vice president Harold Sharon said.

Oppenheimer is a nominee member for Oppenheimer International Equity Limited, Oppenheimer International Equity Exempt Limited Partnership and Oppenheimer International Equity Limited Partnership, which own 3.3 percent, 4.0 percent and 9.5 percent of TeleBermuda's shares respectively.

These three funds, which Mr. Sharon manages, are for high net worth individuals, foundations and pension funds, and offshore individuals, respectively.

TeleBermuda, to compete with the Island's lone international telecommunications services provider Cable & Wireless Bermuda, anticipates it will be operational via satellite within the next few weeks. The company is offering 15 percent rate reductions. Construction of its $45 million Bermuda/US-1 fibre optic cable is on schedule for use in October.

It is believed TeleBermuda has entertained ownership offers from a number of industry partners, among them big US and European telecommunications companies. But the company is likely unwilling to relinquish ownership stakes to big telecoms. After last year's initial public offering, it was reported that TeleBermuda raised $18 million, though short of the $31 million of shares on offer.

TeleBermuda's next largest beneficial owner after Oppenheimer is TeleBermuda (BVI) Ltd., a British Virgin Islands company which holds 15.4 percent of TeleBermuda's shares.

TeleBermuda CEO Michael Kedar, a Canadian, holds preference shares which carry over half the voting rights of TeleBermuda BVI.

After TeleBermuda BVI, Torbay Company is the next largest beneficial owner of TeleBermuda shares.

Torbay, a nominee member for BPI Canadian Equity Value Fund, a mutual fund trust established under the laws of Ontario, holds ten percent of TeleBermuda.

The fund's trustee is Toronto-based BPI Capital Management Corporation.

Following Torbay, is First Bermuda Securities Ltd. CEO and TeleBermuda deputy chairman Jeffrey Conyers who owns 316,891 shares or 9.1 percent of TeleBermuda. TeleBermuda BVI has options to acquire 298,698 shares from Mr.

Conyers.

Currently, Bermudians hold 790,012 shares, or 22.6 percent of the company, just above the required 20 percent. The 60/40 rule was waived giving permission for 80 percent of TeleBermuda to be foreign owned.

Directors and officers and their immediate family beneficially own 1.1 million TeleBermuda shares, or 31.6 percent.

As well as Mr. Kedar and Mr. Conyers, the company's directors include James Gibbons, Ken Spurling and Ward Young.

Mr. Gibbons is managing director Gibbons Deposit Company Ltd., Mr. Spurling is director and CEO Matheson Investment Management (Bermuda) Ltd. and Mr. Young is president and CEO of BDC Ltd.

Other directors are Douglas Cunningham, managing director global mergers & acquisitions CIBC Wood Gundy Securities Inc. and Harley Murphy, director & vice president Wood Gundy Private Client Investment Inc. Both individuals are Canadian.

At TeleBermuda's first annual general meeting, held yesterday at the company's offices in the new Mintflower Place on Par-la-Ville Road, shareholders voted by proxy to elect directors for this fiscal year and on the company's financial statements for the 14 months from incorporation to February 29, 1996.

Over that period, the company posted a loss of $1.4 million.

But the results are for a non-operating company.

US bank has big stake in TeleBermuda From Page 33 The AGM comes only two days after the Senate approved the Telecommunications Amendment Act.

Mr. Kedar called the Act "perhaps the most progressive and enlightened telecommunications legislation anywhere.'' He also said the Act provides the stable commercial environment needed to create sustainable competition and ensure TeleBermuda's future viability.

"The legislation also provides the positive and solid regulatory framework, including protections against anticompetitive actions by (Cable & Wireless Bermuda), necessary for TeleBermuda to meet capital requirements.'' TeleBermuda, a publicly-listed company, trades on the Bermuda Stock Exchange.

TeleBermuda also owns TeleBermuda International (Canada) Ltd. providing management services. The company also holds 20 percent of the voting interest and 99.9 percent of the economic interest of TeleBermuda International LLC, a Delaware limited liability company. The remaining interest is owned by Elbac Cable Corporation. TeleBermuda LLC was formed to hold the US cable landing licence for the Bermuda/US-1 cable system in compliance with US telecommunications regulations.