Telekom Austria announces EUR400m impairment for M-Tel

26 Jun 2014

Telekom Austria Group has announced that it will book an impairment of approximately EUR400 million (USD545.32 million) for its Bulgarian unit MobilTel (M-Tel), primarily due to an increase in the cost of capital within the Bulgarian segment, and changed expectations with regards to medium-term macroeconomic developments in the country. According to a company press release, half of the total impairment is due to a change in the weighted average cost of capital (WACC), which increased by over 20% over a five-month period to May 2014. The Bulgarian subsidiary was the only group segment where the increase in WACC resulted in the need for an impairment, Telekom noted. The changed medium-term macroeconomic expectations are expected to impact on the Bulgarian telecoms market as a whole. The impairment will be reflected in Telekom’s consolidated financial statements for the first half of 2014, and will negatively impact net income and equity.

Bulgaria, A1 Bulgaria (Mobiltel), A1 Telekom Austria Group