VimpelCom writes down value of WIND Mobile to zero

WIND Mobile

The future of WIND Mobile is a little cloudier today after parent company VimpelCom announced that it had written down its investment in the Canadian carrier down to zero. It attributed its FY 2013 Q4 net loss to “non-cash impairment charges taken on our assets in Ukraine and Canada.” The writedown for Canada was valued at US$768 million.

VimpelCom added that “the challenges the Company is facing in the country” triggered the decision to take a writedown. Those same reasons are behind its last-minute withdrawal from Canada’s 700MHz spectrum auction in January.

WIND Mobile CEO Anthony Lacavera was quick to point out that the news would not affect daily WIND Mobile operations. He said in a statement:

“It is business as usual at Wind and this accounting decision has no impact on our operations. With an ever-improving network and an established market presence now in our fifth year of operations, I am more confident than ever that Canadians will enjoy the benefits of our market-leading value proposition and the true competition that Wind brings to the market long-term. Wind is here to stay.”

Global Telecom Holding SAE (formerly Orascom Telecom Holdings), the Egypt-based subsidiary of VimpelCom, reported that WIND Mobile had 676,209 subscribers at the end of 2013, a 14% increase over 2012. Vimpelcom reported a lower valued of 649,000 subscribers. WIND Mobile attributed the lower number to “a reporting error by VimpelCom.”

VimpelCom is not done with “the reassessment of the prospects for continuing operations in the country,” suggesting that it is still looking for a buyer to take WIND Mobile off its hands.

Sources : The Globe and Mail // Vimpelcom // Global Telecom Holding SAE