Vedanta Resources trims gross debt to $6.4 billion

London-headquartered Vedanta Resources (VRL), the parent company of Indian mining major Vedanta (VEDL), has paid all its maturing loans and bonds due in May and June, reducing its gross debt to $6.4 billion.

This is a reduction of $3.3 billion since Vedanta announced its deleveraging ambition in March 2022, the company said in a stock exchange update.

However, a moment of reckoning is approaching for Vedanta Resources as the miner has $2 billion of bonds due in 2024 — a record annual bill for the company. Pricing data indicate investors have lingering concerns about repayments down the road.

“Vedanta is targeting further debt reduction during the balance of FY24, and ultimately intends to lower gross debt towards zero. This will be aided by our expectations of robust demand, particularly in India, coupled with strong operational performance from our world class asset base,” it added.

VRL’s gross debt has fallen to $6.4 billion from $6.8 billion as of April 2023, $7.8 billion as of March 2023 and $9.7 billion as of March 2022.

In a townhall with shareholders on Wednesday, Vedanta chairman Anil Agarwal said that he expects to make VRL a zero-debt company over the next “few years”.

He also added that there were no plans to pledge further shares to its Glencore International AG. On Tuesday, VRL said it had pledged 4.4% of its overall holding in VEDL to its rival Glencore in lieu of a $250-million loan. VRL and Glencore had signed a loan agreement on May 25.

On acquisitions and opportunities such as NMDC Steel, Agarwal said he would look at it as and when it comes.

Talking on the reopening of Sterlite Copper, Agarwal said, “We will open the plant soon. It is just a question of one or two months and we all will be very proud of this”.

Earlier in April, the Supreme Court granted permission to Vedanta to carry out maintenance work at its closed Sterlite plant in Tamil Nadu. The apex court took the decision based on the report of a high-powered committee formed by the Tamil Nadu government to inspect the structural and civil safety of the plant.

Talking about his vision for the next 10 years, Agarwal said his vision is to make it a “more than $1-trillion company”.

“We will be atmanirbhar, produce our own copper, produce oil & gas, I will be ambassador of India to the whole world. Please come to our country and invest, this is the largest democracy, there is so much of demand,” he added.