Vedanta Resources is looking to refinance up to $5.5 billion of holding company debt.
The group plans to raise funds through 10-year bonds and five-year loans.
The company is looking to spread repayments over a longer period to improve cash flow management.
Inside Vedanta’s Mega Push to Refinance $5.5 Bn in Holding Company Debt
Anil Agarwal-led group is in talks with global banks to raise long-term bonds and loans to ease repayment pressure and better match cash flows after Vedanta's planned demerger
Vedanta
Summary
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Anil Agarwal-led Vedanta Resources Ltd (VRL) has started discussions with global lenders to refinance around $5.25-5.5 billion of debt at the holding company level, The Economic Times reported, citing people aware of the matter.
The London-based parent of Vedanta is looking to raise $3.5-3.7 billion through long-tenor bonds with a maturity of 10 years, while another $1.5-1.7 billion could come via loans with a five-year tenure, the report said.
According to ET, the company has held talks with banks including Citi, JPMorgan, Barclays, Standard Chartered, Mashreq Bank, First Abu Dhabi Bank, Sumitomo Mitsui Banking and Deutsche Bank in recent weeks.
Why Vedanta Is Refinancing
The refinancing plan comes after Vedanta moved ahead with its demerger into separate business verticals earlier this month. People cited by ET said the idea is to align debt repayments with steadier cash flows from dividends and brand fees generated by operating companies.
VRL had about $5.5 billion of debt as of February, including an inter-company loan of nearly $200 million. The company faces annual repayments of $500-600 million over the next three financial years, with obligations rising sharply in FY30, according to the report.
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In the past, large repayments during weak commodity cycles had forced the group to seek higher dividends from operating businesses, which often worried investors.
Vedanta’s Debt Repayment Plan
ET reported that the proposed loans and bonds are likely to have an amortising structure, meaning repayments will be spread across the tenure instead of large lump-sum payments.
The group has already taken several steps to improve its balance sheet. It refinanced $550 million of high-cost debt last fiscal year and reduced borrowing costs by around 160 basis points. VRL said its average debt maturity profile improved to nearly 4.5 years by December 2025, from 1.3 years two years earlier.
Analysts at S&P Global Ratings recently estimated VRL’s EBITDA could touch $7 billion in FY27 and FY28, helping improve cash flow and reduce debt further.
However, analysts have cautioned that the group’s future capital allocation and dividend policy will remain key watch areas as it plans large expansion projects across metals and mining businesses, ET reported.
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