Mining conglomerate Vedanta Ltd repaid a $900 million high-cost loan with a mix of QIP proceeds and a new $350 million facility at a lower interest rate, resulting in $550 million net deleveraging and further strengthening of its balance sheet, according to reports.
The loan, taken by subsidiary THL Zinc Ventures in May 2023 at 13.9% interest, was partially repaid with funds from Vedanta's $1 billion June 2024 QIP.
Furthermore, Vedanta secured a new $350 million loan from JP Morgan and other bankers at a rate of 9.6 percent per year, saving $90 million in annual interest costs, according to sources familiar with the matter.
The refinancing package also includes better terms and conditions, they said.
The action aligns with Vedanta's overarching deleveraging plan. With a medium-term goal of 1x, its net debt-to-EBITDA ratio improved to 1.4x as of the December quarter from 1.9x in the first quarter of FY24.
Vedanta Resources Ltd. (VRL), its parent company, has reduced its debt to $4.9 billion, the lowest amount in ten years.
With unsecured non-convertible debentures (NCDs) offering a coupon rate of 9.40 to 9.50 percent, Vedanta raised Rs 2,600 crore in February, drawing in institutional investors like ICICI Prudential, Kotak, Nippon, Aditya Birla Sun Life, and Axis.
Rating agencies responded positively, with ICRA and CRISIL giving Vedanta a 'AA Rating/Watch with Developing Implications', bolstering its refinancing options at lower costs.
