Vedanta, a London-based resources conglomerate, has made significant transactions to reduce its debt and interest payments. According to sources, the company has saved around $120 million in interest payments by repaying high-interest-bearing loans with lower-cost debt. Additionally, funds raised through a qualified institutional placement (QIP) were used to repay loans, resulting in further savings.
The company has also used funds to refinance a high-interest loan taken by its subsidiary THL Zinc Ventures, saving around $90 million. This refinancing move has enabled the company to reduce its cost of capital.
As a result, Vedanta’s consolidated net debt has decreased to ₹57,358 crore ($6.70 billion) at the end of December 2024, down from ₹62,493 crore at the end of December 2023. The company’s net debt-to-EBITDA ratio has also improved to 1.40 times from 1.70 times during the period.
Credit rating agencies Icra and Crisil have upgraded Vedanta’s long-term rating, citing the company’s efforts to reduce its debt and interest costs. The agencies have projected a significant increase in Vedanta’s EBITDA, which will support its capital expenditures and scheduled debt repayment over the medium term.
Vedanta’s holding company, Vedanta Resources, has also made moves to reduce its debt. The company has refinanced bonds worth $3 billion at 250 basis points lower, resulting in savings of $75 million. Additionally, Vedanta Resources has repaid debt worth $700 million, which had an average rate of interest of 15.5%, leading to savings of $110 million. The company’s net debt has decreased to $11.4 billion as of September 2024, down from $12.3 billion as of March 2024.
Overall, Vedanta’s efforts to reduce its debt and interest payments have resulted in significant savings and improvements to its financial metrics. The company plans to cut its debt by $3.5 billion over the next three years, further solidifying its financial position.