Australia’s Telstra Corporation said on Friday it expects to recognise an impairment charge of about A$300 million ($195.12 million) against its investment in a 35% stake in the Foxtel joint venture with Rupert Murdoch’s News Corp.
Telstra’s decision follows the write down in value of the pay TV operator by News Corp a few hours earlier.
“Foxtel has been facing industry disruption for several years and the COVID pandemic is obviously having an impact as global sports are put on hold, pubs are temporarily closed, and advertisers are forced to carefully reconsider their investments,” Telstra CEO Andrew Penn said in a statement.
News Corp said earlier in its statement it recognised non-cash impairment charges of $931 million related to the goodwill and indefinite-lived intangible assets at Foxtel during the third quarter.
It said that in fiscal 2020 it anticipates 35% to 40% reduction in capital expenditure at Foxtel.
Telstra said the impairment charge is expected to write down the value of its share in Foxtel to about A$450 million from A$750 million.
The expected non-cash impairment charge will not affect its FY20 results on a guidance basis, Telstra added.
Source: Reuters.com