Vedanta looks to refinance $3.8 bn bonds

Billionaire Anil Agarwal’s Vedanta Resources is looking to refinance USD 3.8 billion worth of bonds maturing between 2024 and 2026 with loans of extended maturities and manageable size, a company official said on Friday.

The mining conglomerate has about USD 1 billion of bonds maturing in January next year, followed by a similar size coming up for payment in August 2024. Another USD 1.2 billion bonds are due in March 2025 and another USD 600 million in April 2026. “We are looking to put in place a refinancing package that will include deleveraging (some debt), extending maturities and manageable size,” said Omar Davis, President Strategy at Vedanta Resources.

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He did not give details of the refinancing but expressed confidence in being able to achieve well before due maturities. “We want less big towers (size of loans) and longer maturity periods,” he said. On Thursday, S&P Global Ratings revised the rating outlook on Vedanta Resources to negative from stable to “reflect the heightened refinancing risk”. At the same time, it affirmed its ‘B-‘ long-term issuer credit rating on the company, anticipating it will raise more funds before end-2023. “Vedanta Resources’ large debt maturities that require external financing present downside rating risk,” it had said. “We estimate the company will have a funding gap of as much as USD 2 billion until August 2024.”

Vedanta Resources has debt maturities of about USD 3 billion from now until August 2024, it said. Davis however said the amount being mentioned also includes bank loans. He said the company raised USD 500 million by selling part of its stake in 64 per cent-owned Vedanta Ltd together with dividends and brand fees. Vedanta is sure about its deleveraging and degreasing plans and has clear sight over dividend and cash flow from operating companies, which gives it the comfort of refinancing the bonds maturing between 2024 and 2026, he added.