Vedanta Ltd. has pledged 2.44% more shares of its subsidiary Hindustan Zinc (HZL) to avail a term loan of INR 15bn ($183mn). Hindustan Zinc plans to use the proceeds from the loan for capital expenditure, debt repayment, and operational expenses. Vedanta has a history of having pledged HZL’s shares, and with the latest pledge, it has raised over INR 390bn ($4.7bn) till date. As of March 2022, it had pledged 55.87% of HZL’s shares, and this has now gone up to 59.3%. Vedanta owns 64.92% of HZL. Vedanta Resources, the parent of Vedanta Ltd. has been keenly watched by investors and rating agencies for their ability to pay off debts over the next two years. It has been in talks with credit funds and banks to raise funds. Vedanta Resources has debt obligations totaling $4.2bn ($3.5bn of debt maturities and $700-750mn of coupons) in the next two fiscal years beginning April 1, 2023.
Vedanta’s dollar bonds were trading slightly weak with its 13.875% bonds due January 2024 at 84.48, yielding 39.9%.
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