Veteran MNC mining company Vedanta has reduced its debt by $ 200 million (Rs 16573.40 crore) in the current financial year 2022-23. The veteran billionaire Anil Agarwal-led company is currently trying to address investor concerns regarding the liquidity and the ability to service its liabilities. Under this, the company is trying to pay off its debt fast.
Vedanta has set a target of reducing its debt by $ 400 million (Rs 33146.80 crore) in three years, half of which has been achieved in this financial year. The company has given this information in the exchange filing. According to the company, it has a debt of $ 770 million, which will continue to try to reduce in the next two financial years.
Vedanta’s problems increased due to rising interest rates
Interest rates are rising globally, due to which companies like Vedanta, which have heavy debt and low ratings, are under increasing pressure. Apart from this, the fear of global recession also increased the pressure on the commodities company. Last week, S&P Global Ratings raised concerns that the company could come under pressure if it fails to raise $200 million or sell its international zinc assets.
According to the rating agency, Vedanta will be left with very little cash in the event of not being able to raise funds. The rating agency also said that external funding is very important for debt maturities after September. Now that Vedanta has repaid most of the outstanding dollar bonds, investors are looking upbeat. However, according to Bloomberg Intelligence analysts Mary Ellen Olson, the company’s plans to raise new debt may not completely address market concerns, but it needs to progress at the right time to reduce negative rating pressure. To be.
Vedanta plans to meet half of its liquidity requirements for the next financial year internally and the rest through refinance. Consumption in India is increasing rapidly, so on its own, Vedanta’s cash flow is now looking healthy. Talking about Vedanta Resources’ next phase of growth, investments in its associated companies in semiconductors, display glass, renewables, optical fiber, and transmissions will further strengthen its business.
MORE FOR YOU
