More trouble ahead
Its Brazilian business faltering, Molson may be forced to write down the value of its Kaiser operation by hundreds of millions of dollars. Its minority partner in the venture, Hein-eken, has already announced that it would take an impairment charge on its investment. Heineken said that it would review the valuation of its stake in Kaiser which it bought from Molson for EUR190 million in April 2002. If the calculation of the decrease in value would be based solely on the impact of the drop in value of the Brazilian currency real against the euro, the impairment charge would amount to EUR85 million according to Heineken. Since the deal was signed, the Brazilian real has lost 41 percent against the euro.
Up to now Molson has not taken a write-down on its investment..
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