Vedanta Repays $900 Million loan, Deleverages Balance Sheet by $550 Million

Mining conglomerate Vedanta Ltd repaid a USD 900 million high-cost loan through a mix of QIP proceeds and a new USD 350 million facility at a lower interest rate, resulting in USD 550 million net deleveraging and further strengthening of its balance sheet, sources said.

The loan, taken by subsidiary THL Zinc Ventures in May 2023 at 13.9 per cent interest, was partly repaid using funds from Vedanta's USD 1 billion June 2024 QIP.

Besides, Vedanta raised a new USD 350 million loan at 9.6 per cent per annum from JP Morgan and other bankers, reducing annual interest costs by USD 90 million, sources aware of the matter said.

The refinancing package also comes with improved terms and conditions, they said.

The move aligns with Vedanta's broader deleveraging strategy. As of December quarter, its net debt-to-EBITDA ratio improved to 1.4x from 1.9x in Q1 FY24, with a 1x medium-term target.

Meanwhile, its parent company Vedanta Resources Ltd (VRL) has reduced its debt to USD 4.9 billion - its lowest level in a decade.

In February, Vedanta raised Rs 2,600 crore via unsecured non-convertible debentures (NCDs) at 9.40-9.50 per cent coupon rate, attracting institutional investors, including ICICI Prudential, Kotak, Nippon, Aditya Birla Sun Life, and Axis.

Rating agencies responded positively, with ICRA and CRISIL assigning an 'AA Rating/Watch with Developing Implications', further strengthening Vedanta's refinancing options at lower costs.