Indian steel giant Tata Steel has announced that it expects to register an impairment charge of $1.6 billion for the financial year ended March 31, 2013, as a result of its review for the period in question.
The company attributed the write-down to a weaker macroeconomic and market environment in Europe where apparent steel demand has fallen significantly in the financial year 2012-13 by almost eight percent, which on aggregate results in an almost 30 percent decline since the start of the global financial crisis.
Tata Steel expects the above underlying condition to continue over the near and medium term, therefore leading to the downward revision of cash flow expectations underlying the valuation of European business. The steelmaker indicated that the impairment also includes the effect of write-down of assets in the ferrochrome 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.
