By Jane Chanda
Vedanta Resources, the holding company of Vedanta Limited, is in advanced talks with lenders to raise up to $1 billion through foreign currency bonds.
According to money.com, while the bond issue was a positive step towards refinancing debt and securing financial future, analysts flagged liquidity issues and high debt levels.
Vedanta Resources aimed to reduce debt by $3 billion over three years, with a current debt of $6 billion as of Fiscal year 2024 (FY2024).
Vedanta Limited has planned a capex of $1.9 billion for FY25, intending to reduce working capital requirements.
The company expected aluminium business to generate over $4 billion in EBITDA and forecasts a 20 percent year-on-year rise in domestic sales for Hindustan Zinc.
However, Vedanta Resources’ debt reduction progress was crucial for its long-term sustainability.
The company’s ability to manage debt and generate cash would be closely watched by investors and analysts.
Vedanta Resources has made progress in reducing debt through stake sales and improving liquidity.
The credit rating upgrade by S&P was a positive sign, but the refinancing of $1.2 billion of debt due in April 2026 remained a key challenge.
The company’s efforts to reduce debt and improve financial health were essential.
Investors and analysts would closely monitor Vedanta Resources’ ability to manage debt and generate cash in the coming months.
Vedanta Resources’ diversified portfolio, including aluminium, zinc, and oil & gas businesses, was expected to support its debt reduction plans.
The company’s focus on operational efficiency and cost-cutting measures would also be crucial in achieving its financial goals.
In addition to debt reduction, Vedanta Resources was exploring new business opportunities, including expanding its presence in the renewable energy sector.
This diversification strategy is expected to reduce the company’s dependence on traditional commodities and improve its long-term sustainability.
As Vedanta Resources navigates its debt reduction journey, the company’s ability to adapt to changing market conditions and maintain a disciplined approach to capex would be key to its success.
With a strong management team and a clear strategy in place, Vedanta Resources was well-positioned to overcome its current challenges and achieve its financial goals.
