Tata Steel may sell part of Corus assets, stock down

After writing off $1.6 billion from its balance sheet towards European arm value loss recently, Tata Steel is now looking to sell of some of its European assets in order to deleverage its balance sheet, CNBC-TV18 reported today.

In a bid to make Corus profitable over the long term, the steel major is looking to unlock value by selling the UK and Netherland assets of Corus, the report said. Tata Steel has been struggling to turn its European arm profitable since the time of takeover five years ago. The company took an impairment hit of$1.6 billion on its FY13 balance-sheet on the back of weak environment in Europe.

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"Our view is that its European business is on a knife's edge, but benefits from parent support. If the depleted balance sheet makes it hard to arrange finance, it could be an issue for its rating," Alan Greene, an analyst at Moody's, which has a negative outlook on its rating of Ba3, three notches below investment grade, had said recently

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Between 2007 till date, Tata Steel has seen 30 percent fall in steel demand in Europe. In past few years the company has taken several austerity measures to cut down growing losses of European operations.

At 1:28 pm, shares of Tata Steel were trading 1.59 percent lower at Rs 311 on the NSE.

With inputs from Reuters