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Telekom Austria AG / Telekom Austria Group announces EUR 400 million impairment of its Bulgarian subsidiary Mobiltel (Ad-hoc)
Press Wire ♦
Published: June 25, 2014; 17:06 ♦ (Vindobona)
Today the Telekom Austria Group (VSE: TKA, OTC US: TKAGY) announces that it will book an impairment of approx. EUR 400 mn for its Bulgarian asset Mobiltel as a result of the company's ongoing regular sensitivity analyses. This impairment is primarily due to an increase in the cost of capital of the Bulgarian segment and changed expectations with regard to medium-term macroeconomic developments in Bulgaria, as well as related market effects which affect the valuation of Telekom Austria Group's business plan for the Bulgarian segment.
Telekom Austria AG / Telekom Austria Group announces EUR 400 million impairment of its Bulgarian subsidiary Mobiltel (Ad-hoc) / Picture: © Vindobona.org
Approximately half of the total impairment is due to a change in the weighted average cost of capital (WACC) of the Bulgarian segment as well as changed medium-term expectations as regards macroeconomic risks for Bulgaria, inter alia
due to the crisis in the Ukraine.
As of May 2014 Mobiltel's WACC increased by over 20% versus the last impairment test in the fourth quarter…
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