Tata Steel to write down $1.6 b goodwill

Tata Steel to write down $1.6 b goodwill

Tata Steel, the $26.13-billion steel arm of the Tata Group, said on Monday that it expects non-cash writedown of goodwill and assets to the tune of around $1.6 billion in the consolidated financial statements for fiscal 2013.

The impairment is primarily due to a weaker macroeconomic and market environment in Europe where apparent steel demand has fallen significantly in 2012-13 by almost 8 per cent which in aggregate results in almost 30 per cent since the emergence of the global financial crisis in 2007. The impairment also includes the effect of writedown of assets in the ferro chrome business in South Africa and the mini blast furnace in Tata Steel Thailand which has been impacted by the high cost of raw material feedstock, the company said in a statement. It said the final figures will be included in the full-year results on May 23.

"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," the company said.

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