Vedanta Resources raises $450 million

London-headquartered Vedanta Resources (VRL), the parent company of Indian mining major Vedanta, has raised $450 million from two of its rivals. While it raised $200 million from commodities firm Trafigura Group, it borrowed $250 million from Glencore International AG.

Debt-laden VRL has pre-paid $150 million of its loan taken from Oaktree, according to a report by Nomura, which quoted a report by data and analytics firm Reorg.

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The loan exposure to Oaktree and Trafigura will be about $350 million and $200 million, respectively, indicating an asset coverage of about 3 times against the debt of $550 million at the Oaktree box level, Nomura added. Following these two rounds, Nomura estimated VRL’s cash at $210-220 million as of end-June 2023.

Earlier on May 30, VRL said it pledged 4.4% of its overall holding in its subsidiary and Indian mining major Vedanta to its rival Glencore International AG in lieu of a $250-million loan.

VRL and Glencore had signed a loan agreement on May 25. Switzerland-headquartered Glencore, set up in 1974, is a mining and natural resources company and is a rival to Anil Agarwal-controlled Vedanta group across several geographies.

Under the agreement, VRL is required to procure certain actions on behalf of its subsidiaries Westglobe, Richter Holding and Finsider International Company (FICL) as third-party obligors, Vedanta said in a stock exchange update.

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The move comes at a time when VRL was seeking to shore up funds to trim debt.

As of March, VRL’s stake in Vedanta was at 68.11%, which fell to 65.18% as of May, according to the BSE data. Vedanta holds a 64.92% stake in Hindustan Zinc, which was privatised more than two decades ago, while the Indian government holds a 29.54% stake.