Pressure increasing on Vedanta Resources as debt unaddressed following failed delisting plan

Anil Agarwal, executive chairman, Vedanta

PRESSURE was growing on the credit rating of Vedanta Resources, a holding company owned by mining tycoon Anil Agarwal. This was after a bid to delist the company in India was rejected by a group of minority shareholders, said Bloomberg News.

The aim of the delisting was to improve the parent company’s access to cash flow ahead of some $2bn that needs to be repaid by the Vedanta Group, which includes Vedanta Resources, in the next 12 months, the newswire said, citing a group spokesperson.

Of this amount, Vedanta Ltd holding companies Vedanta Resources Ltd. and Volcan Investments Cyprus must repay a combined $1.17bn next year. That’s the most since 2017, according to data compiled by Bloomberg.

Vedanta Resources, which has a B- junk rating at S&P, has sufficient cash from subsidiaries to meet the debt due in the period, but if there are no significant developments “… it’s likely that there would be renewed pressure on the rating,” S&P Global Ratings analyst Neel Gopalakrishnan told Bloomberg.

One of Vedanta Resources’ companies is Vedanta Zinc International which recently expressed an interest in embarking on the stage two expansion of Gamsberg zinc mine and smelter in South Africa’s Northern Cape.

Moody’s Investors Service last week put London-based Vedanta Resources under review for a possible downgrade, citing increased refinancing risk and large funding needs.