Tata Steel net down 60 per cent on Corus restructuring; may cut 1,500 jobs in UK
25 June 2009
Tata Steel Ltd, the world's sixth-largest steel maker, on Thursday reported a net profit after minority interest and share of profit of associates of Rs4,950 crore ($1.02 billion) in 2008-09, down from Rs12,350 crore last year.
Tata Steel, which owns Corus, Europe's second-largest steelmaker, is expected to cut another 1,500 jobs after it reported a 60 per cent fall in its consolidated net profit.
Tata Steel, which incurred a restructuring cost of Rs4,095 crore on Corus, had to seek changes to the terms of its 3.7 billion pound ($6 billion) loan taken to fund its $13 billion acquisition of Corus in January 2007.
Lenders finally agreed to change the terms without increasing the interest for the remaining tenure of the debt and suspend most earnings-related conditions until March 2010 amidst falling demand for steel and weakening profits, Tata Steel said last month.
Corus, which provides over two-thirds of Tata Steel's output, had cut production by 40 per cent since December. Corus also said around 1,500 jobs are at risk at its production facilities alone because of the economic downturn. ( See: Corus to shed another 2,045 jobs)
The Anglo-Dutch steelmaker is expected to cut 500 jobs in Scunthorpe and 800 in Rotherham, both in northern England, union sources said.