Vedanta Resources under pressure, sounds out bondholders on debt extension

Topics Vedanta Resources | Vedanta  | Bonds

Representational photo: Bloomberg
Vedanta Resources Ltd. has begun sounding out debt holders about the possibility of extending maturities on some of its dollar bonds to reduce refinancing pressures.

 
The mining giant started approaching the investors to discuss possible debt extensions after the company’s failed attempt to delist its India unit, Vedanta Ltd., people familiar with the matter said.

The company’s $670 million of bonds due June next year, which are among notes under discussion with holders, slumped as much as 7.7 cents after the news. That left them set for the sharpest daily drop in more than six weeks, according to prices compiled by Bloomberg.

Pressures are mounting at London-based Vedanta Resources after the delisting flopped, given it would have helped the holding company more easily access cash at the unit. That’s triggered warnings from credit rating firms about Vedanta Resources’ debt pile. Vedanta’s businesses include zinc, aluminum and oil and gas. Those commodities were hit by a slump in demand amid the pandemic earlier this year, though prices have since rebounded.

Investors and rating companies are scrutinizing the group’s refinancing plans as tycoon Anil Agarwal tries to streamline its corporate structure. Holding companies including Vedanta Resources, which are controlled Agarwal, face their highest debt repayments in years.

A spokesman for the Vedanta group declined to comment.


Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel