Vedanta sounds out bondholders on debt extension

(Image courtesy of Vedanta Resources)

Vedanta Resources has begun sounding out debt holders about the possibility of extending maturities on some of its dollar bonds to reduce refinancing pressures.

The mining giant started approaching the investors to discuss possible debt extensions after the company’s failed attempt to delist its India unit, Vedanta Ltd., people familiar with the matter said.

“We would like to clarify that Vedanta Resources is not in talks with any bondholder for debt tenure extension,” a spokesman for Vedanta said in a statement, after the Bloomberg story was published. The spokesman had earlier declined to comment.

The company’s $670 million of bonds due June next year, which are among the notes involved, slumped as much as 7.7 cents after the news. That left them set for the sharpest daily drop in more than six weeks, according to prices compiled by Bloomberg.

Pressures are mounting at London-based Vedanta Resources after the delisting flopped, given it would have helped the holding company more easily access cash at the unit. That’s triggered warnings from credit rating firms about Vedanta Resources’ debt pile. Vedanta’s businesses include zinc, aluminum, and oil and gas. Those commodities were hit by a slump in demand amid the pandemic earlier this year, though prices have since rebounded.

Investors and rating companies are scrutinizing the group’s refinancing plans as tycoon Anil Agarwal tries to streamline its corporate structure. Holding companies including Vedanta Resources, which are controlled Agarwal, face their highest debt repayments in years.

(By Bijou George and Luca Casiraghi, with assistance from Swansy Afonso)

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