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Unformatted text preview: t present value of future payments for mobile licenses is recognised as interest bearing liabilities. /page 63/
telenor annual report 2011
notes to the financial statements / telenor group Current interest-bearing liabilities debt debt debt adjusted debt adjusted before the for the before the for the effect of effect of effect of effect of currency currency currency currency NOK in millions swaps swaps swaps swaps Company/segment debt instrument Currency 31.12.11 31.12.11 31.12.10 31.12.10 Telenor AsA Telenor AsA Total Telenor ASA EMTN program limit EuR 7 500 GsM licenses 2) NOK JPy sEK usd EuR 1) NOK - - - - 1 556 13 1 569 1 405 - 146 488 (483) 13 1 569 1 435
2 434 1 931
2 434 MyR dKK usd usd PKR usd THb THb iNR 283 65 89 6 101 201 - - 8 140 312 9 198
10 767 283 65 89 - 107 - 201 - 8 140 312 9 198
10 767 64
8 751 64
8 751 diGi borrowings from financial institutions denmark uMTs and lTE licenses 2) Telenor Pakistan ltd GsM license 2) Tameer Microfinance bank ltd borrowings from financial institutions Tameer Microfinance bank ltd borrowings from financial institutions dTAC borrowings from financial institutions dTAC borrowings from financial institutions dTAC bonds uninor borrowings from financial institutions Other current interest-bearing liabilities Total subsidiaries
Total current interest-bearing liabilities
1) 2) Telenor AsA’s current debt position in EuR is a net asset position when including currency swaps.
Net present value of future payments for mobile licenses is recognised as interest bearing liabilities. Coupon payments on bonds issued under Telenor ASA’s EMTN programme during the last 5 years range from 4.125% to 4.95%, but the
majority of these bonds are swapped to floating rate. The latest issuance was in 2010 when a EuR 750 million bond was issued with a 4.125%
coupon and maturity in 2020. The average interest rate for uninor’s loans in 2011 was 12.1%.
All outstanding debt issued by Telenor ASA is unsecured. The financing agreements except for the Commercial Papers, contain provisions
restricting the pledge of assets to secure future borrowings without granting a similar secured status to the existing lenders (negative
pledges) and also contain covenants limiting disposals of significant subsidiaries and assets.
Debt issued under Telenor ASA’s EMTN programme is based on documentation that is commonly used for investment grade issuers in the
Eurobond market. Telenor ASA’s outstanding bonds under its existing EMTN Programme are subject to a Change of Control Clause. Such
Change of Control shall be deemed to have occurred if a person or entity, other than the Kingdom of Norway directly or indirectly, own or
acquire more than 50 per cent of the issued ordinary share capital of Telenor ASA, whereby such change in ownership or acquisition leads to
a downgrade below investment grade rating, the holder of such bonds can require Telenor ASA to redeem the principal amount together with
accrued interest. The full definition of this Change of Control clause is described in the Final Terms for each specific bond issue.
The interest-bearing liabilities in subsidiaries are generally not guaranteed by Telenor ASA and are subject to standard financial covenants,
some of which limit the ability to transfer funds to Telenor ASA in the form of dividends or loans. As of 31 December 2011, uninor had NOK 8.1
billion in current interest-bearing borrowings, all with financial guarantees from Telenor ASA. /page 64/
telenor annual report 2011
notes to the financial statements / telenor group / 30 / Managing capital and financial risk management
The Group’s capital allocation priorities are:
1. Maintain a strong financial position
2. An attractive shareholder remuneration
3. Disciplined and selective approach in terms of mergers and acquisitions (M&A) The main priority of maintaining a strong financial position is targeted by keeping reported net debt/EBITDA below 2.0 in order to ensure
access to funding through an investment grade rating. As of 31 December 2011, the reported net debt/EBITDA ratio was 0.6 (0.7 as of
31 December 2010) and Telenor ASA’s long term credit rating was A3, stable outlook (Moody’s) and A-, stable outlook (Standard & Poor’s).
The Group’s capital structure consist of debt that includes the borrowings disclosed in note 29, cash and cash equivalents and equity
attributable to the shareholders of Telenor ASA as presented in the consolidated statement of changes in equity and in note 25, excluding
components arising from cash flow hedges.
In order to adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders,
acquire or sell treasury shares or issue new shares. In 2011 Telenor returned NOK 10.7 billion kroner to shareholders, comprised of NOK 6.3
billion of ordinary dividends paid in June 2011 (NOK 3.80 per share) and NOK 4.4 billion of share b...
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