Vedanta cuts debt by $550 million, saves $90 million in interest costs
Vedanta has repaid a high-cost $900 million loan, reducing net debt by $550 million and saving $90 million annually in interest. The repayment was funded by a $1 billion QIP and a new $350 million facility at a lower rate. Vedanta's net debt-to-EB...
By Rajesh Mascarenhas, ET Bureau | Updated:
Agencies
Metals to mining giant Vedanta has repaid a $900 million high-cost loan, reducing net debt by $550 million and securing $90 million in annual interest savings, sources said.
The repayment was funded through proceeds from Vedanta’s $1 billion qualified institutional placement (QIP) in June 2024 and a new $350 million facility arranged at a lower 9.6% interest rate from JPMorgan and other lenders. The original loan, taken by subsidiary THL Zinc Ventures in May 2023, carried a steep 13.9% rate.
The move is part of Vedanta’s broader deleveraging push. As of Q3 FY25, its net debt-to-EBITDA ratio improved to 1.4 times from 1.9 times in Q1 FY24, with a medium-term target of 1x. Parent Vedanta Resources Ltd. (VRL) also cut its debt to $4.9 billion — the lowest in a decade.
In February, Vedanta raised ₹2,600 crore through unsecured non-convertible debentures (NCDs) at 9.4%-9.5%, drawing interest from institutional investors like ICICI Prudential, Kotak, Nippon, Aditya Birla Sun Life, and Axis. ICRA and CRISIL assigned the NCDs an ‘AA/Watch with Developing Implications’ rating, enhancing Vedanta’s refinancing options.
The company had earlier raised ₹8,500 crore via a QIP in July 2024, issuing shares at ₹440 apiece.
The repayment was funded through proceeds from Vedanta’s $1 billion qualified institutional placement (QIP) in June 2024 and a new $350 million facility arranged at a lower 9.6% interest rate from JPMorgan and other lenders. The original loan, taken by subsidiary THL Zinc Ventures in May 2023, carried a steep 13.9% rate.
The move is part of Vedanta’s broader deleveraging push. As of Q3 FY25, its net debt-to-EBITDA ratio improved to 1.4 times from 1.9 times in Q1 FY24, with a medium-term target of 1x. Parent Vedanta Resources Ltd. (VRL) also cut its debt to $4.9 billion — the lowest in a decade.
In February, Vedanta raised ₹2,600 crore through unsecured non-convertible debentures (NCDs) at 9.4%-9.5%, drawing interest from institutional investors like ICICI Prudential, Kotak, Nippon, Aditya Birla Sun Life, and Axis. ICRA and CRISIL assigned the NCDs an ‘AA/Watch with Developing Implications’ rating, enhancing Vedanta’s refinancing options.
The company had earlier raised ₹8,500 crore via a QIP in July 2024, issuing shares at ₹440 apiece.
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