Telenor to write down Rs 3,570 crore in 2G licenses
The write down is an accounting exercise and has no impact on the running of Uninor's operations and the fact that the Uninor operations will continue, a company statement said.
Norway's leading telecom firm Telenor on Friday announced it will write down around Rs 3,570 crore in 2G licences and India goodwill on its accounting books.
A write down is a downward revision in the value of an asset in the balance sheet of a company. Goodwill in accoutning is the difference between the actual price and an estimated fair price a company has paid for an asset.
The decision shows the effects of Supreme Court verdict on Thursday.
The writedown will be included in Q4 results of the company, it reported to a Norwegian Stock Exchange.
Shares of Telenor fell over 2 per cent post the announcement. It now has around Rs 2,000-crore exposure to India on its books.
In a statement, Telenor said:
"According to IFRS accounting standard, Telenor is committed to continuously assess its book value of assets and liabilities. Following the current developments regarding the award of 2G licenses, Telenor ASA has decided to write down NOK 4.2 billion related to its investments in India. The write down is an accounting exercise and has no impact on the running of Uninor's operations and the fact that the Uninor operations will continue. Telenor Group intends to protect its lawful investments in the country and we are looking to the government to arrive at a fair solution."
The decision comes a day after the Supreme Court scrapped 122 licenses allotted by the telecom ministry post January 2008 under A Raja.
The order resulted in cancellation of all 22 licenses held by its Indian subsidiary, Uninor, which it owns in partnership with real estate company Unitech.
Telenor has a 67.25 per cent stake which it purchased in 2009 for Rs 6,000 crore.
That deal is being scrutinized clearly amid allegations that Unitech made a quick profit by buying a telecom licence for Rs 1,600 crore and then selling it at a massive mark-up. The promoters point out that they did not sell their stake, but diluted equity by issuing fresh shares.
The government has said that neither Unitech nor Telenor broke the laws that prevailed at the time.