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The dollar bondholders were jittery about timely payment because 100% of the promoter’s equity is pledged with lenders, and delay in arranging refinance prompted Moody’s to downgrade the ‘corporate family rating’ by one notch last October. Within days of the downgrade,
announced it would discontinue rating engagement with Moody’s.
Vedanta Resources (VRL), the parent company of India-listed Vedanta, has $400 million and $500 million bonds due in April and May, respectively. There is also a loan payment of $1.2 billion and an interest payment of $400 million due in the first half of this calendar year.
Vedanta informed analysts that VRL is in talks with Oaktree to raise $750 million and with PSU banks for a $500 million term loan. Sources said it is in negotiating terms with the and . The combination of term loans from Oaktree and PSU banks adds up to $1.25 billion.
“Remainder amount is a combination of brand fees, which you pay in the first quarter, and dividend. So both for Q4, we are fully locked in,” Sunil Duggal, group chief executive officer, told analysts. The company also told analysts that the brand fee would be about $300 million.
Oaktree had earlier provided $750 billion to the metal maker against the share pledge of the promoter’s stake. Duggal spoke about upsizing by $750 million Oaktree loans.
At an earnings conference call of Vedanta Resources held mid-December 2022, VRL management informed analysts that they are in talks with Oaktree to refinance the dollar bonds while adding that the collateral with them “is quite high, value is almost $2.8 billion-$3 billion”.
At the same earnings call, VRL management said they are in talks with Barclays to roll over the $150 million loans. The management also said it is committed to deleveraging its debt from $8 billion to $4 billion over three years.
Besides the $900 million bond dues, VRL has to make payments of $250 million to Oaktree, $150 million to Barclays and $250 million inter-corporate deposits in the first half of this calendar year. ET reported on January 25 that VRL is seeking to raise $2 billion in bridge loans for bond and debt payments. , indirectly controlled by Anil Agarwal through Vedanta and directly owned by Vedanta Resources, has paid substantial dividends this fiscal year.
Vedanta, 69% held by VRL and the Anil Agarwal family, paid four dividends amounting to ₹30,112 crore. Hindustan Zinc, 65% owned by Vedanta, paid ₹20,915 crore in dividends.
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