Tata Steel shares slip on impairment charge announcement

Tata Steel shares slip on impairment charge announcementTata Steel shares slipped nearly 2.3 per cent in early trade on Tuesday on account of the company's announcement that it was taking an impairment charge of $1.6 billion.

The steel giant announced on Monday that it was taking a $1.6 billion (nearly Rs 8,000 crore) hit on its profit for financial year 2013. The company is all set to announce results for the past financial year on 23rd of May.

Tata Steel blamed its beleaguered European operations for the huge impairment charge.

The company also said that it expected a non-cash write-down of goodwill & assets in its consolidated financial statement for the financial year ended March 31. The impairment charge also includes write-down on the company's assets in Thailand and South Africa.

Commenting on the development, an analyst with a domestic brokerage said, "The Company currently has a goodwill valued at Rs 19,000 crore and intangibles of around Rs 3,500 crore. Of this, Rs 8,000 crore has been written off."

In the financial year 2012, the company had reported an increase of Rs 2,056 crore in the intangible asset to Rs 17,355 crore.

Technically, the goodwill impairment means that the value of Tata Steel's Corus Plc, which was acquired for $12 billion in 2006, has slipped to around $10 billion.