Vedanta Resources, owned by billionaire Anil Agarwal, has reportedly paid off loans worth $800 million taken from Standard Chartered Bank in London and Hong Kong. The company aimed to allay concerns about its liquidity amid rising interest rates and mounting pressure on borrowers with high debt. In April, Vedanta Resources had already paid all loans and bonds due last month, reducing its gross debt to $6.8 billion. The move will release the encumbrances on the shares of its subsidiary, Vedanta Ltd. Vedanta group aims to become a “net zero debt company” in 2-3 years as the company has ample cash flow to service all its debt repayment obligations, according to Anil Agarwal.
Repayment of $800 Million Debt by Vedanta Resources to Standard Chartered
Mining company Vedanta Resources, owned by billionaire Anil Agarwal, has reportedly repaid loans worth $800 million taken from Standard Chartered Bank in London and Hong Kong. The company’s move to repay its loans aims to address concerns about its liquidity amid rising interest rates and mounting pressure on borrowers with high debt.
Releasing Encumbrances on Subsidiary Shares
In an exchange filing, the London-based company stated that it repaid three facilities obtained from Standard Chartered Bank in London and Hong Kong, thereby releasing the encumbrances on the shares of its subsidiary, Vedanta Ltd.
Heavy Reliance on Dividends from Indian Units
Vedanta Resources has traditionally relied on hefty dividends from its Indian units, taking up record amounts last fiscal year to meet its short-term liabilities. However, with the company’s dollar notes due this month and larger debts coming due in 2024, the focus is now on how it will service these obligations.
Debt Repayment Obligations
In a recent interview, Anil Agarwal stated that his Vedanta group has ample cash flow to service all its debt repayment obligations and that it aims to become a “net zero debt company” in 2-3 years. Vedanta Resources Ltd., the parent company of Mumbai-listed mining giant Vedanta Ltd, has already paid all its maturing loans and bonds due this month, reducing its gross debt by a further $1 billion.
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