Tata Steel says to take $785 mn non-cash writedown in Q4

MUMBAI: Tata Steel expects to take a non-cash write down of goodwill and assets of about Rs. 5000 crore for the last financial year, mainly relating to the long products UK business in Europe, it said in a regulatory filing on BSE.

The stock is down 6%.

The impairment also included a write down of investments in overseas raw materials projects in Mozambique, Ivory Coast and Taconite project in Canada, the steelmaker said in a statement. It said the economic viability of these projects remains uncertain at the current level of commodity prices.

"The review was undertaken taking into account the external economic environment and macro-economic conditions in each geography of operation, the underlying demand–supply imbalance facing the global steel industry, significant volatility in iron ore and coal prices in the last twelve months and the current view of long term forecast of steel and its raw material prices," it said.

The Rs. 5000 crore non-cash impairment charge will add up to the Rs. 1577 crore charge the company took in the first quarter for the last financial year, Tata Steel added. It said its liquidity position or financial covenants will be unaffected by the non-cash write down.

Tata Steel Europe's loss-making long products business in Europe is up for sale. Geneva-based Klesch Group is looking at possibly buying it.