Axiata Group takes writedown on Idea assets

21 Aug 2018
00:00
News
Daily News

Malaysia's Axiata Group will book a non-cash impairment charge of 3.32 billion ringgit ($810.2 million) on the carrying value of its shares in Idea Cellular as a result of the upcoming Vodafone-Idea merger.

In a filing to the Bursa Malaysia stock exchange, Axiata announced that it has unconditionally relinquished some of the rights under the agreement covering its 20% stake in Idea Cellular.

These include the rights to appoint an Axiata representative to the board, as well as stake anti-dilution rights, Axiata said.

With the planned merger between Idea and Vodafone India edging closer to completion, Axiata's stake in the combined company will be diluted to below 10%, effectively transforming Axiata's investment from a strategic to a simple investment. The impairment charge reflects this, the company said.

The charge is expected to have an impact on the company's earnings, net asset per share and gearing for the current financial year.

By way of comparison, Axiata said that if the relinquishment of rights and reclassification of Idea as a simple investment had been completed at the end of 2017, the company would have swung to a net loss of 2.79 billion ringgit ($680.9 million) instead of recording a profit of 909 million ringgit.

Related content

Comments
No Comments Yet! Be the first to share what you think!