Vedanta Ltd shares will be in focus in Thursday's session following a media report that parent Vedanta Resources Ltd (VRL) has initiated a liability management operation in an attempt to restructure $3.8 billion in bond repayments due over the next three years. VRL obtained funding from a bank and private credit funds. According to an Economic Times story, the Anil Agarwal company was offering investors several alternatives to extend maturities and partially prepay three debts.
According to people familiar with the matter, Vedanta Resources was looking to pledge 13 percent of its stake in India-listed Vedanta Ltd as part of the plan to secure a $1.25 billion financing package from a group of lenders led by New York-based Cerberus Capital Management and Standard Chartered Bank. The decision may help VRL avoid a default on $1 billion in bonds due in January.
On Wednesday, India's Vedanta Ltd said that its board of directors would review and approve a second interim dividend for the current fiscal year on Monday, December 18. Promoters owned 63.71 percent of India-listed Vedanta Ltd.
Vedanta stated that if granted, the dividend would be paid on Wednesday, December 27. Vedanta had declared its first interim dividend of Rs 18.50 per share earlier in May. On May 30, the stock became ex-dividend. Vedanta's dividend payouts have increased dramatically in recent years, with the company announcing a total dividend of Rs 37,572 crore in FY23, Rs 16,689 crore in FY22, and Rs 3,519 crore in FY21.
The Vedanta stock finished at Rs 253.20 on the BSE on Wednesday, up 2.63 percent. The stock is down 19.9 percent year to date, owing to concerns about anticipated delays in refinancing the parent company's forthcoming debt maturities beyond the expected timetables. Last month, Crisil downgraded the Anil Agarwal-led company's long-term rating on Rs 56,263.50-crore debt instruments and bank loan facilities, citing a "increased likelihood of Vedanta's consolidated financial leverage (ratio of net debt-to-Ebitda) for the current fiscal remaining higher than the rating thresholds of 2.7 times."
It stated that Vedanta Resources was in the process of refinancing bonds maturing in January 2024 ($1 billion), August 2024 ($0.95 billion), and March 2025 ($1.2 billion), which could potentially reduce VRL's refinancing pressure, "thereby reducing Vedanta's need for significantly large annual dividend payouts over the medium term."
