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.
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