Vedanta refinances $900 million loan at lower cost

Anil Agarwal-led Vedanta, a metal and mining conglomerate, has strengthened its balance sheet by repaying a $900 million high-cost loan through a mix of QIP proceeds and a new $350 million facility at a lower interest rate, resulting in $550 million net deleveraging.

The loan that was repaid was availed by subsidiary THL Zinc Ventures in May 2023 at 13.9 per cent interest and was partly repaid using funds from Vedanta’s $1 billion June 2024 QIP.

Vedanta secured a new $350 million facility at 9.6 per cent per annum from JP Morgan and other bankers, reducing annual interest costs by $90 million.

The refinancing package also comes with improved terms and conditions.

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The move aligns with Vedanta’s broader deleveraging strategy. As of Q3 FY25, its net debt-to-EBITDA ratio improved to 1.4 times from 1.9 times in Q1 FY24. It has a medium-term target of one time.

Meanwhile, parent company Vedanta Resources has reduced its debt to $4.9 billion—its lowest level in a decade.

In February, Vedanta raised ₹2,600 crore via unsecured non-convertible debentures at 9.40-9.50 per cent, attracting institutional investors including ICICI Prudential, Kotak, Nippon, Aditya Birla Sun Life and Axis.

Rating agencies responded positively, with ICRA and CRISIL assigning an ‘AA Rating/Watch with Developing Implications,’ further strengthening Vedanta’s refinancing options at lower costs.