Vedanta Resources' bondholders back debt restructuring plan

Vedanta Resources, based in the UK, announced its successful acquisition of bondholders' support to restructure its immediate debt, thus alleviating repayment pressures on the parent company of Vedanta Ltd, the Indian metals conglomerate owned by billionaire Anil Agarwal.

The restructuring proposal aimed to address four series of bonds, including those maturing in 2024, 2025, and 2026, strategically designed to ease the colossal $6.4 billion debt burden, with a significant $4.5 billion payment due by fiscal 2025.

High bondholder surpasses

Securing consent from approximately 97 per cent to 100 per cent of bondholders across these four series exceeded the mandatory 66.67 per cent threshold, stated Vedanta Resources in a regulatory filing, emphasising that this overwhelming support alleviates immediate debt repayment obligations.

Despite recent downgrades from S&P Global Ratings and other agencies, reflecting concerns about the restructuring plan and the firm's outstanding debt, bondholders exhibited overwhelming confidence in Vedanta Resources' revised terms.

Group Chairman Agarwal, in efforts to curtail debt, previously attempted an unsuccessful privatisation bid in 2020. The year 2023 witnessed Hindustan Zinc, a Vedanta unit, aiming to acquire some of the conglomerate's zinc assets, a deal contested by the Indian government, which holds a significant minority stake of 29.54 per cent in Hindustan Zinc.

In December, Vedanta Resources successfully raised $1.25 billion from financial institutions, earmarked for refinancing and securing a new credit facility, reinforcing the company's commitment to managing its financial obligations amidst the restructuring efforts.

(with Reuters inputs)