TeliaSonera makes €733M write-down on Eurasia, Danish operations

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TeliaSonera said it would book SEK7.2 billion (€773 million/$844 million) in total non-cash impairment charges for the fourth quarter of 2015, with the bulk related to its operations in Uzbekistan.

The move follows the Sweden-based company's decision to "fully leave" the Eurasian area over time. TeliaSonera also said "Region Eurasia" would be reported as discontinued operations in its financial report for 2015.

Of the total impairment charges, SEK5.3 billion relates to Uzbekistan and SEK1.9 billion to the operations in Denmark due to withdrawal from the proposed joint venture there with Telenor.

Johan Dennelind, president and CEO of TeliaSonera, said the company was "well on track" towards shaping the "new TeliaSonera", adding that the process to reduce the group's presence in Eurasia continues.

"An important step was taken in December when we announced the divestment of Ncell in Nepal. As a consequence of this progress and current status in the overall divestment process, Region Eurasia will be reported as discontinued operations. When doing this we are obliged to change valuation method for these operations. This has resulted in an impairment charge relating to our operations in Uzbekistan," Dennelind explained.

TeliaSonera agreed to sell its 60.4 per cent stake in Nepalese operator Ncell to Asian telecoms group Axiata for $1.03 billion (€945 million), marking the first step in the operator's strategy to gradually divest its Eurasian operations.

The move followed the operator's announcement in September last year that it intended to reduce its presence in seven Eurasian markets and focus on operations in the Nordics and Baltics, with the goal of creating a "new TeliaSonera". As well as Nepal, it currently has investments in Kazakhstan, Uzbekistan, Azerbaijan, Georgia, Moldova and Tajikistan.

At the time of the announcement, Jefferies International analysts described the news as positive, noting that it "promises an end to board and management distraction, and a reduction of uncertainty over operating outlook and fair valuation of far-flung operations."

Indeed, as Jefferies pointed out, the fall-out of alleged transgressions relating to deals in Eurasia, particularly in Uzbekistan, has created significant upheaval at TeliaSonera, including senior management and board personnel changes.

In November, Turkcell also said it had made a non-binding offer for TeliaSonera's 58.55 per cent stake in Fintur Holdings, which co-owns the stakes in Azerbaijan, Georgia, Kazakhstan and Moldova. Turkcell owns 41.45 per cent of Fintur.

For more:
- see the TeliaSonera release

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