Vedanta Mulls to Raise $1 Billion to Prepay Liabilities, Upgrade Credit Ratings

Billionaire Anil Agarwal-led Vedanta Resources is mulling to raise nearly $1 billion to prepay and refinance high-yield debt. The Indian metals giant Vedanta’s parent company is eyeing to refinance 9.25 per cent non-guaranteed bonds worth $600 million and 13.875 per cent coupon bonds worth $400 million ahead of their due date in 2026 and 2028, respectively, Reuters reported, citing sources. 

“The market will be far better mid-January and with that, we will wait and watch the market and look for both $460 million and $600 million- the unsecured maturity- to be addressed sometime in January,” said chief financial officer at Vedanta Resources, Ajay Goel during a recent earnings call. “The one obviously is high cost and bringing down the cost of funding to a single digit in the near future and a far lower number in mid-term is one priority,” Goel added. 

The move to proactively prepay its liabilities aligns with the company’s goal to lower cost funding to single digits and target credit rating upgrades. The global credit rating agencies S&P Global and Fitch rated the company ‘B/Stable’ and ‘B-/Positive’ as of December 30, 2024, respectively.  

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“Once we tap a billion ($1 billion) in January-February and do some more actions, we believe that BB is of course in striking range in the near future,” Goel informed the investors during the call. 

This comes at a time when the company’s revenue from operations nosedived 3.4 per cent annually from Rs 38,945 crore in Q2 of FY24 to Rs 37,634 crore in Q2 FY25. 

Recently, the company also pulled back from its earlier decision to demerge Base Metals undertaking to balance its liabilities across various businesses. The metals-to-oils conglomerate announced its commodity operations will be demerged into six new publicly listed companies to attract sector-specific investment in September 2023. 

“Lenders believe the scheme would be more favourable for unlocking value and overall optimal balancing of debt allocation across residual Vedanta and resulting companies if the Vedanta base metals undertaking is retained in residual Vedanta itself,” the company said in an exchange filing on December 20. 

The metals giant said it might consider a demerger at a later stage when its business matures to its optimal potential. 

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