Press release Tele2 Group Jan 27 2009, 10:58 AM CET
Tele2 appeal the County Administrative Court's decline on deduction
Stockholm - Tele2 AB, ("Tele2"), (OMX Nordic Exchange: TEL2 A and TEL2 B), today announced that the company has not been allowed to deduct the capital loss of SEK 13.9 billion, which was associated with the liquidation of S.E.C. S.A. in 2001. The County Administrative Court has declined a deduction with reference that the capital loss could not be considered real. Tele2 will appeal the decision made by the County Administrative Court.
In 2000, Tele2 acquired the outstanding majority of the listed entity S.E.C. S.A.. The assets and liabilities of S.E.C. S.A. were, in connection with a restructuring, transferred to a new legal entity. At the time of the transfer, S.E.C. S.A.'s value was decided by an independent valuation which showed a decrease in the market valuation of the operation. As a result, Tele2 claimed a tax deduction for the established loss.
The Tax Authority did not agree that the deduction of SEK 13.9 billion should be allowed and the matter has now been assessed by the County Administrative Court. The Court has refused Tele2's claim for deduction related to capital loss. The decision by the County Administrative Court will lead to increased tax payments of approximately SEK 3.9 billion since the capital loss has already been deducted against earlier years' profits. Tele2 considers that the prerequisite for a deduction has been fulfilled and no reservation has been made for the increased tax payments. An independent valuation of S.E.C. S.A. has shown that the capital loss to be real. Support for Tele2's claim for deduction can also be found in court practice. Tele2 will appeal the decision made by the County Administrative Court.
Further information can be obtained from:
Lars Nilsson, CFO, Tel: +46 8 5626 4000
Lars Torstensson, Investor Inquiries, Tel: +46 702 73 48 79
Tele2 is one of Europe's leading alternative telecom operators. Tele2's mission is to provide price leading and easy to use communication services. Tele2 always strives to offer the market's best prices. We have 24 million customers in 11 countries. Tele2 offers mobile services, fixed broadband and telephony, data network services, cable TV and content services. Ever since Jan Stenbeck founded the company in 1993, it has been a tough challenger to the former government monopolies and other established providers. Tele2 has been listed on the OMX Nordic Exchange since 1996. In 2007, we had net sales of SEK 40.1 billion and reported an operating profit (EBITDA) of SEK 6.3 billion. For more information, visit www.tele2.com.