NEW DELHI: Billionaire Anil Agarwal's Vedanta Resources Ltd on Tuesday said it has enough means to meet debt repayment liabilities in the coming quarters as it looked to assuage investor concerns around its financial position.
In a statement, the firm, which is the majority owner of Mumbai-listed mining and oil and gas company Vedanta Ltd, said it is in the advanced stage of finalization to tie up $1.75 billion through a combination of syndicate loan and bilateral bank facilities.
Vedanta Resources said it has pre-paid all of its debt that was due for repayment till March 2023, deleveraging by $2 billion in the past 11 months. Further, it is confident of meeting its liquidity requirements for the quarter ending June 2023.
Vedanta Ltd, it said, continues to deliver healthy cash flows and does not have any pledge except 6.8 per cent of HZL shares.
Vedanta Ltd shares tanked 6.58 per cent to close at Rs 268.45 on BSE.
Earlier this month, S&P Global Ratings stated that the company's credit ratings may "come under pressure" if it is unable to raise $2 billion and/or sell its international zinc assets.
Vedanta Ltd (Vedanta Resources has 70 per cent stake) has proposed sale of the international zinc business to Hindustan Zinc Ltd (Vedanta Ltd has 65 per cent ownership) for nearly $3 billion.
The government reportedly is averse to the deal. Valuation of the assets is among several concerns flagged by the government, which holds a 29.54 per cent stake in HZL, which was privatised more than two decades ago.
"Vedanta Resources Limited has pre-paid all of its maturities due till March 2023 and has deleveraged by USD 2 billion in the past 11 months. Thus, it has achieved half of its $4 billion 3-year debt reduction commitment in the first year, ahead of its plans for this fiscal," the company said in a statement.
"We would like the investors to note that Vedanta group operating companies, underpinned by strong operating profitability from diversified and low-cost tier-1 assets, are delivering healthy cash flows whilst maintaining disciplined capital allocation".
During FY 2022, Vedanta Limited delivered an EBITDA of $6.1 billion and free cash flow (pre-capex) of $3.6 billion.
"Vedanta Resources is fully confident of meeting its upcoming maturities in quarter ending June 23. We have multiple options for both refinancing as well as repayment through internal accruals. We are in advance stage to tie up required financing through a $1 billion fresh loan from a syndicate of banks. We are also close to finalise $750 million bilateral facilities with various relationship banks. The remaining liquidity requirements can be addressed internally," it said.
Vedanta Limited, the subsidiary of Vedanta Resources, does not have any pledge except 6.8 per cent of Hindustan Zinc Limited's shares.
"Over the past 20 years, Vedanta Resources has raised more than $35 billion and has an excellent track record of debt servicing. Vedanta remains confident of servicing its debt obligations through multiple options including capability to make payments through internal accruals at all times," the statement added.
S&P had stated that Vedanta Resources is fully funded until March 2023, following a dividend declared by Vedanta Ltd in January.
"We estimate further dividends from Vedanta Ltd, together with management fees, can be used to meet about $1.5 billion of the $2 billion the parent requires between April and June, including inter-company loans and interest expenses," it had said.
Debt maturities next fiscal include $500 million of loan repayments in the quarter ending December 31, 2023 and a $1 billion bond in January 2024.
Vedanta has a portfolio comprising zinc (the world's largest integrated producer), aluminium (India's largest producer of primary aluminium), oil and gas (India's largest private producer of crude oil), silver (6th largest producer globally), battery metals: Nickel (India's sole nickel producer) and cobalt, copper, iron ore and steel and commercial energy.
