Tata Steel has announced a $1.6bn writedown on its struggling European division. Its European operations has been hit by the 30% fall in steel demand in the Eurozone since the emergence of the global financial crisis in 2007. The company’s 2012 turnover was $26.13 billion, so the write-down is a pretty big deal.
Europe’s steel industry woes are pretty well documented and its main steel trade association had urged a 25% cut in capacity to remain relevant. However, closing steel plants are a challenge as the sector is seen as strategically and symbolically important by politicians.
In December last year, ArcelorMittal wrote down the goodwill in its European businesses by about $4.3 billion and ThyssenKrupp wrote down $4.7 billion of its Americas unit.
Tata Steel is expected to announce its financial results on May 23rd. Is some “spring cleaning” in store as the new Chairman takes over? (ET, FT)
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