Vedanta in advanced stages to tie up fresh loans of $1 bn

London-headquartered Vedanta Resources, the parent company of Indian mining major Vedanta, is in advanced stages to tie up fresh loans of $1 billion from a syndicate of banks.

The company, which is close to finalising $750-million bilateral facilities, is confident of meeting its maturities for the quarter ending June 23. “The remaining liquidity requirements can be addressed internally,” the company said in its filing with Singapore Exchange.

“We have multiple options for both refinancing as well as repayment through internal accruals,” the company added.

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The company also said it is “fully confident” of meeting upcoming maturities in the quarter ending June 23.

Vedanta Resources also said it pre-paid all of its maturities due till March 2023 and has deleveraged by $2 billion in the past 11 months. Thus, it has achieved half of its $4 billion three-year debt reduction commitment in the first year, ahead of its plans for this fiscal.

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“We would like the investors to note that Vedanta group operating companies, underpinned by strong operating profitability from diversified and low-cost tier-I assets, are delivering healthy cash flows whilst maintaining disciplined capital allocation. During FY22, Vedanta Limited delivered an Ebitda of $6.1 billion and free cash flow (pre capex) of $3.6 billion,” the company said.

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.

Vedanta, the subsidiary of Vedanta Resources, does not have any pledge except 6.8% of Hindustan Zinc’s (HZL) shares.

On February 15, Vedanta Resources had stated it had reduced net debt by $2 billion in the past 11 months, ahead of its own deadline, as it intends to allay market concerns. The company will continue to reduce its $7.7 billion net debt during fiscal 2024 and 2025.

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In an earlier report, S&P Global Ratings had stated that Vedanta Resources’ liquidity hinges on its fund-raising abilities and the next few weeks would be crucial for the company.

The company was “highly-likely” to meet its obligations until September 2023. However, sustaining liquidity beyond.