Bangalore:
Vedanta Resources said Wednesday it had cut debt significantly, in an effort to allay market concerns after S&P Global Ratings last week cast doubt on its ability to meet financial obligations after September.
The company, which is owned by billionaire Anil Agarwal – the parent company of Indian commodities giant Vedanta Ltd – said it had cut net debt by $2 billion over the past 11 months, surpassing its own target.
S&P Global Ratings said on Feb. 8 that while the company is likely to meet its obligations until September, liquidity after that depends on crucial fundraising and Vedanta Ltd’s proposed sale of international zinc assets to Hindustan Zinc.
Vedanta Resources said Wednesday it has healthy cash flow driven by robust domestic consumption and growth will be driven by its sister companies’ investments in semiconductors, display glass, renewables, fiber and transmission.
The London-based firm also said it plans to cover 50% of its fiscal 2024 liquidity needs internally and the rest through refinancing.
The statement from Vedanta Resources also comes as Indian conglomerate Adani Group continues to grapple with the fallout from a US short seller’s critical report on its trading practices, which wiped $120 billion from its market value.
Vedanta Ltd, which mines zinc, silver and aluminum and drills for crude oil, reported a 41% drop in third-quarter profits in January, hit by a fall in commodity prices.
In its report, S&P said its rating on Vedanta Resources would likely come under immediate pressure if a planned $2 billion fundraising and asset sale did not go through in the coming weeks.
The rating agency added that the group would be left with about $500 million after repayments in the absence of outside financing.
In 2020, Vedanta Resources failed to delist Vedanta Ltd as it did not receive the required number of shares needed to buy back.
(Except for the headline, this story has not been edited by DailyExpertNews staff and is being published from a syndicated feed.)
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