Telenor ASA – Annual report – 31 December 2017
NOTE 19 Associated companies and joint arrangements (extract)
1) Share of net income (loss) includes the Group’s share of net income (loss) after taxes, amortisation of excess values, impairment losses and adjustment for differences in accounting policies.
2) The Group’s share of net losses in Riks TV AS (an associated company) exceeds the investment in shares. The excess amount of NOK 26 million has been applied to the Group’s other long-term interests in Riks TV AS of NOK 21 million classified as other financial interest-bearing non-current assets and a remaining amount of NOK 5 million is recognised as provision. See also note 21.
On 7 April 2017, the Group disposed of a portion of its ownership in VEON corresponding to 70 million VEON ADSs or approximately 4% of the total share capital of VEON. After this disposal, Group’s ownership of VEON was reduced from 23.7% to 19.7%.
Following the transaction, the Group lost its significant influence over VEON and discontinued recognising VEON as an associated company. Accordingly, the accumulated balance of currency losses previously recognised in other comprehensive income was reclassified to the income statement. The reclassification effect did not impact the total equity of the Group.
As a consequence of loss of significant influence, the remaining VEON ADSs and common shares were classified as a financial investment, under the heading “Other non-current assets” in the statement of financial position. VEON ADSs and common shares are categorised as an “available for sale” investment at fair value, see note 21.
The Group had an ownership interest of 50% in SnT Classifieds which further owns 50% of the Latin American online classifieds joint ventures. On 11 May 2017, the Group entered into an agreement with Schibsted ASA to sell its ownership interest of 50% in SnT Classifieds. The transaction was closed on 30 June 2017.
701Search Pte Ltd.
The Group had an ownership interest of 33.3% in 701Search Pte Ltd. which owns online classified sites in Malaysia, Vietnam and Myanmar. On 11 May 2017, the Group entered into an agreement with Schibsted ASA and Singapore Press Holdings to acquire 66.7% ownership interest in 701Search Pte Ltd. for a cash consideration of NOK 1.8 billion. The carrying amount of the Group’s 33.3% ownership interest in 701Search Pte Ltd. was NOK 347 million before this transaction. As a result of the transaction, the Group re-measured its previously owned equity interest at fair value and recognised a gain of NOK 352 million.