Vedanta Resources' bondholders back debt restructuring plan for four series of bonds

Vedanta Resources, a UK-based firm, announced on Wednesday that it has gained the backing of its bondholders to restructure portions of its imminent debt, thereby easing the repayment strain on Vedanta Ltd, its Indian metals conglomerate subsidiary. The company had last year proposed a restructuring of four series of bonds maturing in 2024, 2025, and 2026 to alleviate its substantial debt liability.

With an outstanding debt total of $6.4 billion including a $4.5 billion sum due by fiscal 2025, the firm had been endeavoring to extend the maturities of its debt and make amendments to certain bond terms and waivers. The company received approval from approximately 97% to 100% of its bondholders across the four bond series, surpassing the mandatory threshold of 66.67%, according to a regulatory filing.

Vedanta Resources stated that this significant consent to the revised terms would immediately alleviate the company's debt repayment burden. This approval from investors transpired despite a downturn in the company's ratings by S&P Global Ratings in December. The rating agency suggested that the restructuring plan was brought about by a high probability of a traditional default.

Throughout 2020, the company faced several rating downgrades by other rating agencies due to concerns about the group's outstanding debt. Group Chairman Anil Agarwal made multiple attempts to reduce the group's debt, including a failed bid to privatize the company. The company's bid to allow its unit Hindustan Zinc to acquire some of its zinc assets to reduce debt was contested by the Indian government in 2023. The government holds the largest minority stake in Hindustan Zinc at 29.54%.

In December, Vedanta Resources raised $1.25 billion from financial institutions for refinancing, which incorporated a new credit facility.

With inputs from Reuters