Vedanta Ltd today said it will issue non-convertible debentures (NCD) worth Rs 2,000 crore as the mining conglomerate aims to refinance its debt.
In a BSE filing, the Anil Agarwal-led firm said: “Subject to favourable market conditions… in the process of issuing secured, rated, non-cumulative, redeemable NCDs of Rs 10 lakh each up to Rs 2,000 crore on a private placement basis.”
The issuance of NCDs is part of the overall debt refinancing of the company to substitute short-term liabilities and/or to retire higher cost debt, the filing added.
The NCDs are proposed to be listed on BSE, it said.
“This issue is part of the overall approval of Rs 8,000 crore by the Board and the shareholders at the 50th AGM of the company held on July 11, 2015, permitting issuances in one or more series/tranches on a private placement basis during 12 months,” Vedanta said in the filing.
The stock was down 2.24 per cent at Rs 104.80 in the afternoon trade on BSE.
For the quarter ended June 2015, Vedanta said its gross debt rose Rs 1,778 crore to Rs 79,530 crore on account of funding project payments and temporary working capital requirements, adding that debt levels are expected to come down as working capital is repaid in Q2 of 2015-16.
Out of the total debt of Rs 79,530 crore, debt in Indian currency is Rs 38,616 crore and the balance Rs 40,914 crore in US dollars.
The gross debt comprises loans of Rs 64,825 crore for the long term and Rs 14,705 crore for short-term working capital.
However, the firm said finance cost at Rs 1,358 crore was lower by Rs 179 crore, primarily due to debt refinancing at a lower cost for the June quarter.
In May, Vedanta’s parent company London-based Vedanta Resources had said it’s eyeing likely low interest rates in India to refinance its short-term loans of up to USD 1.6 billion (about Rs 10,200 crore) with long-term options this fiscal.
The mineral and mining major has loans worth USD 2.5 billion maturing in 2015-16, of which USD 2.1 billion is with the subsidiaries and the remaining USD 0.4 billion the group firm Vedanta Resources.