Vedanta Ltd shares rose nearly 2% to 275 on the BSE in early trading on Wednesday after billionaire Anil Agarwal’s Vedanta Resources Ltd said on Tuesday that it has enough cash to meet debt repayment obligations in the coming quarters, as it sought to allay investor concerns about its financial position. The corporation also stated that it had pre-paid all of its maturities until March 2023.
“Vedanta Resources Limited has pre-paid all of its maturities due till March 2023 and has deleveraged by USD 2 billion in the past 11 months. As a result, it has completed half of its USD 4 billion, three-year debt reduction commitment in the first year, ahead of its plans for this fiscal year,” the company said in a statement.
The stock had dropped around 14% in the previous day due to a stumbling block in its acquisition of state-owned Hindustan Zinc and a strong surge in the US currency, which caused the Vedanta bond yield to decrease.
S&P Global Ratings indicated earlier this month that the company’s credit ratings may “come under pressure” if it is unable to raise $2 billion and/or sell its overseas zinc holdings.
The rating agency stressed that Vedanta Resources’ capacity to satisfy its financial commitments beyond September would be contingent on a planned $2 billion fundraising as well as the proposed sale of THL Zinc Ltd., a Vedanta Ltd. company with zinc holdings in Africa.
Vedanta Resources, the primary owner of mining and oil and gas business Vedanta Ltd., said in a statement on Tuesday that it is nearing the completion of a $1.75 billion syndicate loan and bilateral bank facility.
The Hindustan Zinc purchase, which was announced on January 19, is now in jeopardy after the government-nominated directors on Hindustan Zinc’s board rejected the transaction and stated in a letter dated February 17 that they will oppose subsequent motions.
Vedanta Limited, founded by billionaire Anil Agarwal, operates in the mining and metals sectors, with operations in zinc-lead-silver, iron ore, steel, copper, aluminium, power, oil, and gas in India, South Africa, and Namibia.