Loss of Tata Steel Europe, Britain’s largest steel producer, rose to 1.2 billion pounds during 2012-13 from 846 million pounds the previous year.
Owing to poor market condition in the second half of the year, the firm witnessed 14 per cent decline in revenues to 8.7 billion pounds.
Decline in steel prices, muted demand and competition from cheap imports are affecting the financials of the company.
Media reports indicate that Tata Steel Europe has net borrowings of 3.4 billion pounds and the company spent 352 million pounds in interest charges last year to service the huge loans.
Most of Tata Steel’s manufacturing facilities are in Europe, which is a high-cost area and where demand for steel products is much lower than in developing parts of the world.
However, the Tata group, which also owns Jaguar Land Rover (JLR) and Tetley in Britain, has rejected claims that it may have to sell the European steel operation to pay down its crippling debts.
A number of initiatives, including a strategic review of its asset portfolio are being taken in order to maintain the ability to compete successfully in the long term.
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