On 29 November, GO plc issued a Company Announcement confirming that the Forthnet S.A. shares listed on the Athens Stock Exchange, have been transferred into the “Under Surveillance” segment. This arose from the total goodwill impairments of €56.9 million incurred by Forthnet in its financial statements between 2010 and the first six months of 2011 due to the deteriorating macro- economic situation in Greece and its impact on the Group’s outlook and Weighted average Cost of Capital (WACC). These impairments led to losses in Forthnet’s books which are greater than 30% of the total equity thereby breaching the parameters of the Athens Stock Exchange (ASE) Rulebook.
GO plc owns a 50% shareholding in the joint-venture Forgendo Limited with the other 50% owned by GO’s parent company Emirates International Telecommunications Limited. In turn, Forgendo holds 41.27% of Forthnet’s share capital. Over the years, GO’s investment in Forthnet through Forgendo totalled €119.7 million but this investment value has been reduced to €41.1 million as at 30 June 2011 following a number of impairments and share of losses incurred since 2008.
Forthnet is scheduled to hold an Extraordinary General Meeting during which shareholders will be asked to approve a number of changes to Forthnet’s share capital and a €30 million rights issue.
In conclusion, the announcement by GO indicated that its investment in Forgendo (and the joint-venture’s investment in Forthnet) will now be reassessed as at 31 December 2011 and GO is currently not in a position to determine the extent, if any, to which these events impact the assessment of the value in use as at 31 December 2011.