London: Indian steel giant Tata Steel's European arm has reported a record loss of 1.2 billion pounds for the year.
Tata Steel Europe, Britain's largest steel producer, reported the losses for the year until March 31 as part of its latest results filed at Companies House in the UK.
They mark a massive rise from 846 million pounds the previous year.
As per the company's filing, revenues fell 14 per cent to 8.7 billion pounds due to a "deterioration to market conditions in the second half".
The company, previously Corus before being bought over by the Indian conglomerate back in 2007, has been battered by falling steel prices, a slump in demand and competition from cheap imports.
According to 'The Sunday Times', Tata Steel Europe has net borrowings of 3.4 billion pounds dating back to the 6.7 billion deal 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.
But it has ordered a review of the business, which could include asset sales.
The accounts say: "In order to maintain its ability to successfully compete in the long term, the group is, therefore, undertaking a number of initiatives, including a strategic review of its asset portfolio."
The newspaper quoted sources as saying that Tata Steel plans to close down its research and development centres on Teesside and in Rotherham, South Yorkshire.
It could also seek a partner to invest in the plant at Scunthorpe, Lincolnshire.
Last year's huge loss was inflated by a significant charge of 484 million pounds for restructuring and impairment in the value of assets.
In May, Tata Steel revealed a 1 billion pounds write-down in the value of its European arm, underlining the chronic difficulties faced by the company.
Tata Steel Europe employs 32,500 workers, including about 19,000 in Britain.
Its main operations are at Port Talbot, south Wales, and at Scunthorpe.
First Published: Sunday, July 14, 2013, 18:39