Vedanta Resources, a UK-based company, announced on Wednesday the successful approval from its bondholders to restructure a portion of its upcoming debt, providing relief to Vedanta Ltd, its Indian metals conglomerate subsidiary. Last year, the company proposed restructuring four bond series set to mature between 2024 and 2026 in an effort to alleviate its considerable debt burden.
The firm, carrying a total debt of $6.4 billion, including a $4.5 billion amount due by fiscal 2025, aimed to extend debt maturities and modify specific bond terms and waivers. Approximately 97% to 100% of bondholders across the four bond series granted approval, surpassing the required threshold of 66.67%, as per a regulatory filing.
Vedanta Resources emphasized that this substantial consensus on revised terms would immediately ease the company's debt repayment obligations. Despite a downgrade in the company's ratings by S&P Global Ratings in December, indicating a high likelihood of a conventional default, investors' approval for the restructuring plan remained unchanged.
Throughout 2020, the corporation experienced multiple downgrades in its ratings from various agencies due to concerns surrounding the group's outstanding debt. Anil Agarwal, the Group Chairman, pursued several initiatives to alleviate the group's debt burden, notably an unsuccessful attempt to privatize the company. Moreover, the company's effort to mitigate debt by allowing its subsidiary, Hindustan Zinc, to acquire some of its zinc assets faced opposition from the Indian government in 2023. Notably, the government holds the largest minority stake in Hindustan Zinc at 29.54%.
In December, Vedanta Resources secured $1.25 billion from financial institutions to refinance its obligations, which involved establishing a new credit facility.
