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Etisalat writes off $827 mn, evaluates India options

Source : IANS
Last Updated: Thu, Feb 09, 2012 14:20 hrs

Mumbai/New Delhi, Feb 9 (IANS) Abu Dhabi-based telecom firm Etisalat Thursday wrote off its investments worth $827 million in the mobile company Etisalat DB and said the company is evaluating its strategic options in India.

Etisalat is the second foreign firm to do so after the Norwegian Telenor, parent company of Uninor, following the Supreme Court's order to cancel 122 2G licences last week.

Etisalat said it had to take the step in accordance with international accounting norms. 'In accordance with International Financial Reporting Standards (IFRS), Etisalat management decided to recognise an impairment charge amounting to an aggregate AED 3,044 million ($827 million),' said the company in a filing at the Abu Dhabi Stock Exchange.

The company has a 45 percent stake in Etisalat DB, which is a joint venture between the DB Group and Etisalat. The Indian mobile service provider had 1.6 million customers as of Dec 31 and ranks 14th in a market of 15 operators.

'Etisalat is continuing to assess the legal consequences of the Supreme Court's decision and its strategic options in India. Based on the outcome of our assesment and certain developments, there may be further impacts on our finanical statements which will be reflected in due course.'

Etisalat is the second foreign firm to do so after the Norwegian Telenor, parent company of Uninor, following the Supreme Court order.

Telenor had said it had written off its investment of about $724.5 million (4.2 billion Norwegian Kroner) following the Supreme Court order cancelling the service provider's 22 licences.

Thursday's development came as the Indian government kept a close watch on the business and diplomatic fallout of the Supreme Court order. Sources said it was weighing all options, including a filing a review petition.

Another foreign investor, Bahrain-based Batelco, Wednesday said it would exit from India, selling its stake in mobile firm STel.

STel, which had acquired licences to operate in six circles, is a joint venture between Batelco and Sky City Foundation, owned by former Aircel promoter and serial entrepreneur C. Sivasankaran.

While Batelco has thrown in the towel, the other player having considerable foreign stakes, Sistema Shyam Teleservices, has said it would fight the order.

Telenor, which has the Norwegian government as its majority shareholder, got its IT minister to lobby its case, while the company said it was also looking at legal recourse.

Russian Communication Minister Igor Shchyogolev is also expected to meet his Indian counterpart Kapil Sibal to argue Sistema's case.

--Indo-Asian New Service

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