Vedanta repays $100 million to Standard Chartered Bank, pledged shares released

Vedanta Limited, controlled by billionaire Anil Agarwal, has repaid $100 million to Standard Chartered Bank via release of encumbrance on March 10, 2023.

In a regulatory statement, the company said: “The earlier disclosure was made pursuant to facility agreement dated 8 September 2022 entered into between Twin Star Holding Limited (as borrower), Vedanta Resources Limited and Welter Trading Limited (as original guarantors), and Standard Chartered Bank (Singapore) Limited (as original lender)... for the purposes of availing a facility of an aggregate amount of $100,000,000.”

Vedanta Resources is the majority owner of BSE-listed Vedanta Ltd. 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.

It added that the company is confident of meeting its liquidity requirements for the quarter ending June 2023.

The recent step to repay Standard Chartered Bank is in line with the company's strategy to convince the investor community that the debt is within their manageable limits. "We have a tremendous asset base which delivers high cash flows. There is the full capability to repay. With the ongoing expansions, we expect our revenue to be $30 billion in the near term," the company said in a social media post recently.

Last Friday, rating agency Moody’s Investor Service downgraded the corporate family rating of Vedanta Resources to Caa1 from B3 earlier over increasing refinancing risks in debt maturities. The outlook for the rating remains negative, it said in its statement.

Moody’s said the negative outlook reflects Vedanta Resources’ sustained weak liquidity profile and Moody’s concerns over the company’s ability to address its imminent cash needs.

It added ongoing delays in Vedanta Resources’ refinancing efforts and its continued reliance on dividend receipts are depleting liquidity at its operating subsidiaries.

Vedanta’s debt repayment liabilities came under scanner after the Centre opposed the proposed sale of the international zinc business to Hindustan Zinc.

Earlier, S&P Global Ratings too stated that Vedanta’s credit ratings might “come under pressure” if it is unable to raise $2 billion or sell its international zinc assets.

This observation unnerved the investors and markets, which saw massive sell-offs in the company stock. In the last one month, shares of Vedanta have crashed nearly 10 per cent.

The London-headquartered company had a net debt of $9.66 billion as of March 31, 2022. After repayments and borrowings, it has about $7.7 billion outstanding, of which $3 billion is due for repayment in the fiscal year starting April 2023.

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