Vedanta has today announced that the facility of $100 million, for which an agreement was signed between the company and StanChart Bank in September 2022, has been repaid today. And, as a result, the pledged shares with StanChart Bank have been released.
On September 8, 2022, Twin Star Holding (as borrower), Vedanta Resources & Welter Trading (as original guarantors), Standard Chartered Bank (Singapore) (as original lender), & Standard Chartered Bank (as arranger and agent) had entered into an agreement for the purpose of availing a facility of an aggregate amount of $100 million.
The Anil Agarwal-led firm has been in focus recently with some of the rating agencies flagging the group's inability to raise funds to pay back its scheduled debt repayment later this year. In reaction to that, shares have been under pressure over the last few weeks. Also, it’s reflected in the bond prices of Vedanta Resources. Moody’s Investors Service recently downgraded Vedanta Resources’ corporate family and unsecured bond ratings to Caa1 and Caa2 respectively with the outlook on all the ratings being negative.
“The rating downgrades reflect the increasing refinancing risk surrounding holding company Vedanta Resources’ large debt maturities & ongoing delays in holdco VRL’s refinancing efforts and its continued reliance on dividend receipts are depleting liquidity at its operating subsidiaries," says Moody’s.
Anil Agarwal though seems to not agree on reports w.r.t group finding difficulties in raising funds to meet the debt payment schedule. He says, “The company has ample funding options, and it aims to become a zero-debt company.” “Everybody wants to finance us,” he said, citing Indian banks and “American funds”, which he declined to name.
Besides the issue related debt payment, the company is also involved in a tussle with Narendra Modi-led Indian govt on Vedanta’s international zinc asset sale to Hindustan Zinc, in which Govt is a minority shareholder with over 29 percent stake. In a recent stock exchange filing, the government warned of legal action and urged the company to explore other cashless methods for the acquisition of the assets.
Last month, Hindustan Zinc agreed to buy the unit, THL Zinc Ltd (Mauritius), from its parent for $2.98 billion in phases over 18 months. The move was perceived to be an attempt from billionaire Anil Agarwal to cut Vedanta Resources’ debt after a failed attempt to delist Vedanta Ltd. in 2020.
While the Union government said it would vote against the proposal at the extraordinary general meeting (EGM), the company told CNBC-TV18 that it would engage with all minority shareholders and is looking to grow globally via acquisitions.
First Published: Mar 15, 2023 12:10 PM IST
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