Modern Times Group Writes Off $23.9 Million in Ukrainian Assets
The decision was prompted by the uncertain economic situation in Ukraine.
MOSCOW -- Modern Times Group (MTG) will take a $23.9 million non-cash impairment charge as part of its financial results for the second quarter due to the economic and political turmoil in Ukraine where MTG operates satellite TV platform Viasat Ukraine.
"The impairment of the Ukrainian assets reflects the current situation, but make no mistake that we remain committed to the operations and see substantial long term potential for the business, not least given the scale of the country and the upcoming TV digitalization process," Jørgen Madsen Lindemann, MTG president and CEO, said in a statement published on the company's web site.
MTG says it has taken the decision to write down 100 percent of the intangible assets, primarily goodwill, arising from its 85 percent participation in Viastrong Holding AB, which operates the Viasat Ukraine satellite platform through the company Vision TV.
MTG is to put a $23.9 million (160 million Swedish krona) non-cash net impairment related to the Ukrainian satellite pay-TV platform in its Q2 financial results.
The company said that the decision was mainly driven by the uncertain economic outlook in Ukraine and the significant devaluation of the Ukrainian currency, hryvnia.
The Ukrainian hryvnia has lost more than 30 percent of its value since the beginning of this year, and the country's economy is projected to shrink at least by 5 percent in 2014. Although no data regarding the recent performance of the country's TV industry are available yet, many TV stations have reported substantial losses due to pulling out of advertisers.
Modern Times Group is the only major Western broadcasting company that has a considerable presence in the US TV market.