- Changes accounting valuation method for Eurasian operations
- Swedish phone company faces probes over Uzbek business
TeliaSonera AB wrote down the value of its Uzbekistan operations by 5.3 billion kronor as the Swedish company prepares to pull out of the country that is the center of several legal probes over alleged bribery tied to phone licenses.
The accounting method for the Eurasian business will be changed to one based on estimated sales proceeds rather than on discounted cash flow, the company said Thursday in a statement. That will result in a non-cash charge to fourth-quarter operating income, TeliaSonera said. The carrier also is taking a 1.9 billion-kronor charge to write down the value of operations in Denmark, citing “updated earnings projections” following a failed effort to combine its operations in that country with those of Telenor ASA.
The charges, which total $844 million, come as TeliaSonera seeks to focus on European markets to capitalize on higher demand for wireless Web-browsing and video services, while exiting former Soviet countries and Asia amid bribery accusations. The carrier is embroiled in legal investigations in Sweden, the Netherlands and the U.S. over how it bought phone licenses in Uzbekistan. TeliaSonera has said it’s cooperating with the probes and its chief executive officer at the time has said the company broke no laws.
The probes have weighed on TeliaSonera’s stock price. It’s down 19 percent since the company disclosed the U.S. investigation in March 2014. The shares fell 3.2 percent to 38.92 kronor at 10:05 a.m. in Stockholm, where the company is based.
In November, VimpelCom Ltd. took a $900 million provision to cover possible U.S. and Dutch fines over bribery allegations in Uzbekistan in the first indication of what may lie ahead for TeliaSonera. VimpelCom is in talks to pay about $775 million -- a near record -- to settle U.S. allegations it paid bribes in Uzbekistan to win business, according to people familiar with the matter.
Last month, TeliaSonera sold its stake in Nepalese phone carrier Ncell to Axiata Group Bhd. for more than $1 billion, taking the first major step in its plan to exit Asian and former Soviet markets.
In September, the former Swedish phone monopoly and Norwegian rival Telenor scrapped a planned merger of their Danish businesses amid European Union opposition.
TeliaSonera said Thursday Eurasia will be reported as discontinued operations in its consolidated income statement for the fourth quarter and full year of 2015. The carrier is scheduled to report 2015 results Jan. 29.