Telecom Namibia has decided to end its 7 year loss making joint venture with Angolan operator Mundo Startel. The investment has lost more than N$100m for the telco that holds more than 44% shares in Mundo.
An urgent meeting between the two companies is expected to take place to finalise Telecom’s exit in this joint venture that is no longer viable.
“Mundo has struggled to achieve its business plan over the past few years and as a result there is an indication that carrying value of this investment in the company accounts may be impaired.
“By impairment it means a reduction in the value of an asset because the asset no longer generates the benefits expected earlier as determined by the company through periodic assessments,” Telecom Namibia’s Senior Manager Corporate Communications and Public Relations, Oiva Angula, told The Namibian.
He further explained that in the light of the current difficult situation of this venture “Telecom management and Board have impaired the carrying value of this investment in the company’s financial statements by an amount of N$18 million in 2011 to bring the accumulated impairment [loss] of the investment to N$79 million.