Sweden’s Tele2 to book $540 million impairment charge in 3Q
STOCKHOLM, Sweden: Swedish telecommunications operator Tele2 AB said Monday it will book a 3.5 billion kronor, or $540 million impairment loss in the third quarter, mainly related to its acquisition of Societe Europeenne de Communication in 2000.
The Stockholm-based company said the charge is largely attributable to goodwill in Central and Southern Europe and the Benelux countries, while a smaller part is due to fixed assets in Germany and an impairment of its information technology systems.
Tele2 said the charge will not impact its cash flow, adding that its third-quarter earnings before interest and taxes, or EBIT, will be boosted by 1.4 billion kronor in one-time items from the sale of the company 3C as well as divestments made in Denmark and Russia.
The combined net effect will come to around 2.1 billion kronor in losses, it said.
Later Monday, Tele2 said it had sold its Austrian mobile unit to Telekom Austria Group for 65 million kronor in cash. At the end of June, Tele2 had 131,000 mobile customers in Austria.
Lars-Johan Jarnheimer, president and chief executive of Tele2, said “our strength in Austria lies within our infrastructure-based fixed and broadband operation. However, the current market environment leaves us little room for a profitable and sustainable MVNO operation.”
The deal requires regulatory approvals.
