Vedanta share price gains as Anil Agarwal-led firm ‘confident’ of meeting debt repayment liabilities

Shares of Vedanta Ltd surged nearly 2% to ₹275 apiece on the BSE in Wednesday’s opening deals after billionaire Anil Agarwal’s Vedanta Resources Ltd on Tuesday said it has enough means to meet debt repayment liabilities in the coming quarters as it looked to assuage investor concerns around its financial position. The company added that it prepaid all of its maturities due till March 2023.  

“Vedanta Resources Limited has pre-paid all of its maturities due till March 2023 and has deleveraged by USD 2 billion in the past 11 months. Thus, it has achieved half of its USD 4 billion 3-year debt reduction commitment in the first year, ahead of its plans for this fiscal,” it said in a statement.

The stock had fallen about 14% in the previous session after the road block in its acquisition of state-owned Hindustan Zinc and sharp rise in US dollar that led to depreciation of Vedanta bond yield.

Earlier this month, S&P Global Ratings stated that the company’s credit ratings may ‘come under pressure’ if it is unable to raise $2 billion and/or sell its international zinc assets. 

The rating agency highlighted that Vedanta Resources’ ability to meet its financial obligations beyond September would depend on a planned $2 billion fundraising as well as the proposed sale of THL Zinc Ltd, a Vedanta Ltd unit that holds zinc assets in Africa.

In a statement on Tuesday, Vedanta Resources, which is the majority owner of mining and oil and gas company Vedanta Ltd, said it is in the advanced stage of finalization to tie up $1.75 billion through a combination of syndicate loan and bilateral bank facilities.

The Hindustan Zinc deal was announced on January 19 and now is in doubt after the government-nominated directors on Hindustan Zinc’s board opposed the acquisition and said in a letter dated February 17 that they would oppose further resolutions.

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