MTG to Recognize $466 Million of One-Off Costs

STOCKHOLM: Modern Times Group (MTG) has taken a one-time hit of SEK 3,191 million ($466 million) linked to the acquisition of Bulgaria’s Nova Televizia in 2008 and the upcoming closure of its Slovenian station.

MTG will shut down its loss-making Slovenian free-TV network TV3 in the coming months, with a one-off cost of SEK 212 million ($31 million). The company will write down some SEK 2.98 billion ($435 million) on Bulgarian network Nova Televizia, which it acquired in 2008. MTG paid 620 million euros for the channel in 2008 and previously recognized a 296 million euro goodwill impairment from the acquisition.

Hans-Holger Albrecht, the president and CEO of MTG, commented: “These write-downs are mainly non-cash and primarily reflect the operating environment in Bulgaria, where the TV advertising market has not yet returned to growth and the wider Eurozone issues continue to impact. This has delayed the anticipated development of our Bulgarian business and we have therefore taken the conservative approach of fully adjusting the value of these assets on our balance sheet. This does not affect our commitment to the market, or our belief in the longer term potential of our Bulgarian operations.”