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Billionaire Anil Agarwal-led Vedanta Group has been making headlines for fear of defaulting on its loan commitment due later this year. The holding company Vedanta Resources recently released a statement assuaging investors’ concerns.
What is the debt outstanding?
The quantum of bond maturities is pegged at $900 million in the quarter ending March 2024. It has another $830 million loan repayment between October 2022 and March 2023. VRL has external debt maturities of about $3.8 billion, $450 million of an intercompany loan and an annual interest bill of about $600 million.
VRL is purely a holding company without any operations. It will rely on dividends from operating subsidiaries and banks for funding, as cross-border capital markets are expected to remain challenging.
What is the company’s plan?
Vedanta is in the advanced stage of raising $1.75 billion through syndicated loans and bilateral bank facilities. Vedanta is fully confident of meeting its liquidity requirements for the quarter ending June 23. Vedanta, the subsidiary of Vedanta Resources, has no pledge except for 6.8 per cent shares of Hindustan Zinc. Vedanta Resources pre-paid all of its maturities due till March, deleveraging by $2 billion in the past 11 months.
Read more: Vedanta shelves plan to sell copper plant at Tuticorin
Why the sudden concern about Vedanta debt?
The recent attack on Adani Group over its high debt and funding source by a short seller Hindenburg Report has put Vedanta investors on tenterhooks. The nine listed entities of Adani Group had lost 63 per cent of their market capitalisation to hit ₹7.15 lakh crore from over ₹19.19 lakh crore as on January 24 when the Hindenburg report was published.
Also read: Vedanta net down 42% to ₹3,092 cr on lower realisation
What went wrong with Vedanta?
In January, Vedanta Group company Hindustan Zinc put out plans to buyout parent company THL Zinc Ltd Mauritius in a deal worth $2.98 billion. However, the Central Government, which owns a 29 per cent stake in Hindustan Zinc, opposed the sale and threatened to take legal action if the deal was executed. Hindustan Zinc, which has long been a cash cow of Vedanta Group, has reserves of Rs 16,482 crore and announced the third interim dividend for this fiscal of Rs 13 per share in the December quarter.
Read also: Will approach Govt to iron out differences: Hindustan Zinc
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