Tata Steel denies erosion of Corus pension fund value
15 October 2008
Denying media reports that the Corus Group employee pension funds had lost Rs5,352 crore in the April-June quarter due to the equities meltdown, Tata Steel today said in a filing to the exchanges that the pension fund of its Corus operations "were in aggregate surplus of GBP 500 million (USD 1bn) as on June 30, 2008."
The Mumbai-based business daily Mint had reported in its today's edition, "In the April-June quarter, Tata Steel Ltd noted that the employee pension fund of its British unit, the erstwhile Anglo-Dutch steel company Corus Group Plc., lost Rs5,352 crore because of its exposure to equity and other financial markets.
In the aftermath of what has been a sharp decline in global stock markets since then, it is likely that the fund took more hits."
The report said the "ripple effect on one of India's blue chip companies" had demosntrated the impact that the global markets crisis would have on Indian businesses.
The report also noted that "the Corus pension funds had an asset base of Rs1.2 trillion. The size of Tata Steel's consolidated balance sheet on 31 March was Rs92,161 crore."
In its filing Tata steel also said, "The UK Pension Funds of Corus are significantly de-risked with around 70% of the portfolio in debt related instruments. Based on initial quarter end assessment, the surplus as on September 30, 2008 is estimated to be higher than end June 2008."
Tata Steel said that the details of the performance of the UK firm's pension funds would be "disclosed at the time of the publication of the consolidated financial results of the Company in November 2008".
Tata Steel's Corus operations account for 74 per cent of Tata Steel's income.