NEW DELHI: Anil Agarwal-led Vedanta Resources on Saturday said it has repaid $800 million of loans it had taken from Standard Chartered Bank against the company’s shares. The mining giant, in an exchange filing, said all debt repayments coming up in the current cycle have been made and there was no outstanding amount. Subsequently, the encumbrance on all shares was released.
The move will lessen its concerns about its liquidity after surging interest rates intensified pressure on low-rated borrowers with heavy debt loads. Vedanta Resources holds over 68% stake in Vedanta Ltd through its subsidiaries. Vedanta had pledged shares to raise loans on behalf of its subsidiaries Twin Star Holdings, Vedanta Netherlands Investments BV, and Vedanta Resources. A total of 253.2 crore equity shares amounting to 68.1% of the total share capital had been pledged.
In April, the company said it had paid all loans and bonds dues last month, cutting its gross debt to $6.8 billion. It repaid $150 million borrowed from Barclays Bank and $100 million borrowed from Standard Chartered Bank.
S&P Global Ratings stated 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 company had proposed the sale of its international zinc business to Hindustan Zinc (Vedanta has 65% ownership) for nearly $3 billion.
However, the government, which holds 29.54% stake in HZL, opposed this deal as it is a related party transaction and will hit its own share sale plan. However, the company maintained it has enough means to meet debt repayment liabilities in the coming quarters. Moody’s Investors Service downgraded Vedanta Resources’ corporate family rating to Caa1 from B3 last week due to rising refinancing risks in large debt maturities.
‘All debt repayments made in current cycle’
Vedanta Resources said all debt repayments due in the current cycle have been made and there was no outstanding amount. Subsequently, an encumbrance on all shares was released. The move will lessen its concerns about its liquidity as surging interest rates intensified pressure on low-rated borrowers with heavy debt loads