Vedanta Resources has said that it plans to cover 50% of its liquidity requirements for FY24 internally.
Bengaluru:
Vedanta Resources on Wednesday said it has significantly reduced debt, seeking to allay market concerns after S&P Global Ratings last week raised doubts about its ability to meet financial obligations beyond September .
The company owned by billionaire Anil Agarwal – the parent company of Indian resources giant Vedanta Ltd – said it has cut net debt by $2 billion over the past 11 months, well ahead of its target.
S&P Global Ratings said on February 8 that the company could meet its obligations by September, but liquidity beyond that would depend on raising significant funds and Vedanta Ltd’s proposed sale of international zinc assets to Hindustan Zinc.
Vedanta Resources on Wednesday said it has healthy cash flows driven by strong domestic consumption and growth will be driven by investments by its associate firms in semiconductors, display glass, renewable energy, optical fiber and transmission.
The London-based company also said it plans to cover 50% of its liquidity requirements for FY24 internally and the rest through refinancing.
Vedanta Resources’ statement comes at a time when Indian conglomerate Adani Group is still reeling from the fallout from reports critical of US short-sellers over its business practices that wiped off $120 billion from its market value.
Vedanta Ltd, which mines zinc, silver and aluminum and drills for crude oil, reported a 41% drop in third-quarter profit in January, hit by a slump in commodity prices.
In its report, S&P said its rating on Vedanta Resources was likely to come under immediate pressure if it did not progress on $2 billion fund raising and asset sales in the coming weeks.
The rating agency said that in the absence of external funding, the group would be left with about $500 million after repayment.
In 2020, Vedanta Resources failed to take Vedanta Limited private as it could not get the required number of shares to be bought back.
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