China Unicom's Investment in Telefonica Down 50%
Caijing.com.cn, 11/30/12
As of the end of Q3 2012, the total value of China Unicom's (NYSE: CHU; 0762.HK; 600050.SH) investment in Spanish telecom operator Telefonica has shrunk to half of its original sum, according to Chinese investigative business magazine Caijing.
China Unicom has invested twice in Telefonica for a total sum of RMB 11.32 bln. In October 2009, China Unicom and Telefonica exchanged USD 1 bln in shares. In January 2011, the two companies exchanged another USD 500 mln in cash-funded share purchases.
According to China Unicom's most recent financial report, the company's "financial assets at fair value through other comprehensive income" - which, according to Caijing, mainly comprises its equity investment in Telefonica - dropped to RMB 5.57 bln, down 20% from RMB 6.95 bln in December 2011, and down RMB 5.8 bln from China Unicom's total RMB 11.32 bln investment in Telefonica.
Telefonica's share price dropped 12% in the first nine months of 2012 to EUR 88. China Unicom has yet to directly report total impairment losses from its investment in Telefonica.
Keywords: China Unicom investment telecom Telefonica 0762.HK 600050.SH CHU foreign operator overseas
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