Telenor to Write Down $721 Million on India Venture as Licenses Cancelled
Stock Chart for Telenor ASA (TEL)
Telenor ASA (TEL), the Nordic region’s largest phone company, will write down 4.2 billion kroner ($721 million) on its Indian venture after the government said it will cancel the wireless licenses the company needs to operate.
The write down on licenses and goodwill will be booked in the fourth quarter of last year, Telenor said in a statement.
India’s Supreme Court canceled 122 mobile-phone licenses, including 22 to Uninor, which Telenor took over from Unitech Ltd. after the licenses were awarded. Unitech remains a minority partner. The cancellations become effective after four months, Telenor said.
“The risk was really obvious that they were going to write down at least part of the costs they had on the Indian assets and now they’ve charged all of the goodwill and the capitalized value of the licenses,” said Christer Roth, an Oslo-based analyst at DNB. “This is by no means an indication of anything other than the supreme court ruling yesterday. It has no bearing on whether Telenor will stay or go from India.”
The write downs were expected and priced in yesterday, Roth said. Telenor was trading down 0.1 percent at 93.60 kroner as of 4:49 p.m. in Oslo, extending a 4.4 percent drop yesterday.
To contact the reporter on this story: Diana ben-Aaron in Helsinki at firstname.lastname@example.org
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