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Why is the Vedanta Group Under Anil Agarwal in Trouble? Vedanta, the Mining Giant, is Under a Debt Burden

  • Posted on March 1, 2023
  • News
  • By Akta Yadav
  • 321 Views
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 Vedanta Group:-
Particularly now that the Adani Group debacle has come to light, Vedanta Group, a giant in the mining industry, is getting attention for all the wrong reasons. Vedanta Resources Ltd, the Group's London-based company, has a mountain of debt, including $500 million in loan repayments due on December 31, 2023, and a $1 billion bond due in January 2024. Vedanta Resources, a heavily indebted company with a market value of $13.23 billion, has been attempting to lessen its debt load. In the last 11 months, the Business has paid back $2 billion in debt, bringing the total down to $7.7 billion, but observers in the industry fear that may not be enough. Vedanta Group Vedanta Group To repay its debt later this year, the firm must raise $2 billion. Vedanta Ltd. shares have fallen for eight straight trading sessions in response to the overall scenario, including a decrease of roughly 9% on February 28. The stock fell by more than 8.82% on Tuesday, and the most since September 16, 2022, and by 11.20 am, it had dropped to a five-month low of Rs.262 after deducting the cash component of $3.5 billion, the Group's net debt is around $11.8 billion. Vedanta Resources decreased its debt load from nearly $10 billion to $7.7 billion last year. S&P Global Inc. recently released a report stating that Vedanta Resources is fully funded until March 2023 and that until September 2023, it is "very likely" that its parent and key shareholder would fulfill its obligations. This comes after the publicly traded Vedanta Ltd. Declared a dividend in January of this year. The company's credit rating will be stressed if Vedanta cannot move through with either the $2 billion fundraising effort mentioned or the sale of its worldwide zinc holdings to Hindustan Zinc Ltd shortly. Also, the corporation must raise almost $500 million to pay its debt commitments by June 2023 due to the Group's $15 million debt maturities that must be satisfied between July and September. The Vedanta Group has previously committed to delivering over the following three years. It has a $13.9 billion long-term debt that needs to be repaid. The Group's outstanding debt amounts to $1.2 billion by the second half of 2022-2023, $4.1 billion by 2023-2024, $3.9 billion by 2024-25, and $4.7 billion by 2025-2026 and beyond. Vedanta Resources is accountable for about $8 billion of the Group’s debt, while Vedanta Ltd is in charge of the remaining $7 billion or so. By September 2023, Vedanta Resources must repay $300 million in intercompany loans as well as $350 million to two relationship banks. The company only has $500 million left, which will need more to pay back $500 million in the December quarter and $1 billion in bonds in January 2024, so it needs to engage in extensive fundraising activities.   In order to pay off its debt, Vedanta Resources has been looking for a solution. Hindustan Zinc Limited (HZL), the nation’s largest lead and zinc miner, is one such opportunity. Agarwal controls 64.92% of HZL, with the Indian government holding the remaining 29.54%. Given its present credit line of more than $1 billion, Vedanta Resources may ask Indian public sector banks for help with its impending refinancing, according to a Business Today report published on Monday.  The sanctioned sum for Vedanta’s ongoing projects is being taken into account by banks like the Union Bank of India, Axis Bank, Kotak Mahindra Bank, IndusInd Bank and etc. Vedanta Group Vedanta Group With the $15.3 billion total gross debt of the Vedanta group, rupee loan exposure to Indian banking institutions amounts to $6.73 billion. In actuality, loans in foreign currencies account for a sizable chunk of the $8.57 billion. For more updates, please keep visiting our website www.topstoriesworld.com, where we provide unbiased, trustworthy, and top stories of the world.  
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