Tata Steel takes $1.6bn hit as Europe drags

 
City A.M. Reporter
TATA Steel shocked markets yesterday by revealing it will book a $1.6bn (£1bn) writedown for the year to 31 March due to weakness in Europe, its main market.

The company said steel demand had fallen eight per cent in Europe for 2012 and 2013, meaning aggregate steel demand across the Eurozone has fallen a third since the financial crisis, hitting its business.

“The above underlying condition is expected to continue over the near and medium term, and has led to the downward revision of cash flow expectations underlying the valuation of the European business,” it said in a statement.

The impairment also includes the effect of a writedown in its South African ferro chrome business and a small blast furnace in Tata Steel Thailand.

The writedown by Tata, which has a turnover of $26.1bn, is the largest ever recorded in Indian corporate history.