KPN to incur €3.7bn loss as a result of E-Plus sale

Dutch operator group KPN has announced it is expecting to make a loss of €3.7bn that it can deduct against taxes as a result of the sale of its German subsidiary E-Plus to Telefonica Deutschland.

The group said it has reached an agreement with the Dutch tax authorities related to the size of the tax book loss which is expected to be recognised upon completion of the sale of E-Plus.

The €3.7bn is expected to offset KPN’s taxable income in The Netherlands in the coming years, starting in 2014.

The statutory tax rate in The Netherlands is 25 per cent. Dividends received and/or capital gains realized on KPN’s 20.5 per cent shareholding in Telefónica Deutschland will be subject to Dutch corporate income tax.

“Having reached an agreement with the Dutch tax authorities gives certainty about our tax position for the coming years,” said Eelco Blok, CEO of KPN.

“It is another important step for KPN to continue to invest in its operations and the latest technologies in The Netherlands.”

The sale of E-Plus comes as Mexican operator group America Movil attempts a full takeover of KPN. The group, led by Carlos Slim, announced its intention to acquire KPN in August. It already holds just shy of 30 per cent of the Dutch incumbent.

However, in late August the group said that it is prepared to withdraw its €2.40/share bid for full ownership of KPN after the independent KPN foundation exercised an option to buy shares that has given it almost 50 per cent of the voting rights in the telco.

The Foundation said that it had made the move to protect the interests of a range of KPN stakeholders in the face of what it perceived to be a hostile takeover bid from the Mexican operator.

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