Tatas may have to take write-down of $18 bn, says sacked chairman
New Delhi, Oct 26 (IANS) The sacked chairman of Tata Sons, Cyrus P. Mistry, has indicated that the Tata group was in a bad financial shape, painting a picture of several trouble spots in the group companies.
In his five-page angry letter to the board members of Tata Sons and the trustees of the group, Mistry said that a realistic assessment of the fair value of the “legacy hotspots” like IHCL, Tata Motors PV, Tata Steel Europe, Tata Power Mundra and Teleservices, could “potentially result in a write down over time of about Rs 118,000 crore ($18 billion)”.
He said the capital employed in these companies had risen from Rs 132,000 crore to Rs 196,000 crore, due to operational losses, interest and capex. “This figure is close to the networth of the group which is at Rs 174,000 crore”, thus painting a picture which shows up these companies in a precarious situation.
Mistry was removed from the position of chairman by the Tata Sons board on Monday, reinstating Ratan Tata to the post, as interim chairman, after four years.