Tata Steel Q4 loss narrows to Rs 1168 cr

Tata Steel's European business including its UK operations has bounced back into the black

Aided by higher revenue from Indian as well as European operations, Tata Steel's consolidated net loss narrowed to Rs 1,168.02 crore for the quarter ended on March 31, 2017 as against a consolidated net loss of Rs 3,041.88 crore for the year-ago quarter.

That compared with a net loss of Rs 3,042 crore in the same quarter a year ago.

The closure of defined benefit in the British Steel Pension Scheme meant that all active members of the scheme became deferred pensioners which resulted into a crystallised non-cash curtailment strain of ₹3,627 crore and is the first step towards restructure of United Kingdom operations, said Tata Steel in a statement on Tuesday.

Consolidated revenue for the quarter rose about 30 per cent from a year earlier to Rs 35,005 crore. Metal stocks are seen outperforming the broader markets on Wednesday with Tata Steel leading the index gains.

The Pension Protection Fund (PPF) has a vital role in protecting people against losing their pension should their employer go bust.

Tata Steel is to pump £550m (€640.8m) into the British Steel Pension Scheme (BSPS) as part of a major restructuring agreed in principle with trustees and the United Kingdom regulator. The company said its consolidated Ebitda/MT rose by 194% to Rs 10,228.

A PPF spokesman said it expected discussions with Tata to conclude soon. If an agreement is reached and the necessary approvals are obtained, Tata Steel will pay a settlement of £550 million to the British Steel Pension Scheme and will sponsor a new closed pension plan, the company said.

"All employees in the United Kingdom can now opt into a defined contribution scheme".

A STEEL firm says a move to cast off North-East operations has helped its finance sheet hit a near ten-year high. "For most scheme members, these modified benefits are expected to be of greater value than those they would otherwise receive by transferring into the PPF".

BSPS Trustee Chairman, Allan Johnston, said:I am pleased that agreement in principle has been reached with TSUK [Tata Steel UK] about sponsorship of a modified pension scheme subject to qualifying conditions.

"There are still important details to be finalised before we are in a position to approve the RAA and we are considering these carefully in light of their impact upon the 130,000 pension scheme members and PPF levy payers".

The three trade unions at Tata Steel UK - Community, Unite and the GMB - said the suggested deal was a "stepping stone" to rescuing some of their members' benefits in a new, albeit less generous, scheme.

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