American Tower Corporation (ATC) has recorded a goodwill impairment charge worth $322 million for its India unit in the quarter ended September 30, 2023, amid continuing business challenges in the country.
In a regulatory filing to the US Securities and Exchange Commission (SEC), ATC said that it performed an interim qualitative goodwill impairment test as of September 30, 2023, using information obtained from third parties to compare the fair value of its India unit to its carrying amount, including goodwill. The result indicated that the carrying amount of the company’s India unit exceeded its estimated fair value. As a result, the company recorded a goodwill impairment charge of $322 million for the quarter and nine months ended September 30, 2023. ATC added that it continues to evaluate the carrying value of its Indian assets, which may result in the realisation of additional impairment expenses or other similar charges.
Further, in the filing, ATC stated that the carrying value of its tenant-related intangibles in India was $0.4 billion as of September 30, 2023, which represented 3 per cent of its consolidated balance of $12.2 billion.
In the SEC filing, ATC informed it had concluded that a triggering event occurred as of September 30, 2023, with respect to its India reporting unit. This was primarily due to indications of value received from third parties in connection with the company’s review of various strategic alternatives for its India operations, including the potential sale of equity interests in its India operations.
Additionally, the company said that a significant reduction in customer-related cash flows in India could also impact its tower portfolio and network location intangibles. The carrying value of its tower portfolio and network location intangibles in India were $0.9 billion and $0.3 billion respectively, which represent 11 per cent and 8 per cent of its consolidated balances of $8.7 billion and $3.3 billion, respectively. It added that the carrying value of goodwill in India was $0.6 billion as of September 30, 2023, which represents 4 per cent of its consolidated balance of $12.6 billion.