In a much awaited statement Vedanta chairman Anil Agarwal said that company will complete the sale of steel assets by March next year. He said the company will be able to meet its repayments to bondholders in January and August next year. “We are looking to reduce debt and make the company zero debt. The debt would either be refinanced or the company would make the payment,” Agarwal said. The company is due to make repayments of $1 billion in January and $500-600 million in August.
The company has started the review of its steel and steel raw material business in June. It was formed through the acquisition of ESL Steel in 2018 for Rs 5,230 crore. Apart from ESL Steel, Vedanta’s steel business includes its domestic iron ore business and Liberia assets. The company has been looking to sell the assets to focus on its core mining businesses.
A week back S&P downgraded Vedanta Resources’ long-term rating and the issue rating on the company’s outstanding debt to ‘CCC’ from ‘B-‘ and placed it on ‘CreditWatch Negative’. Prior to that, Moody’s lowered Vedanta’s corporate family rating to Caa2 from Caa1 and the company’s bonds to Caa3 from Caa2.
Also last week, Vedanta announced a vertical split of the business into six companies. As per the proposed demerger, the existing company will be split into different entities, i.e. Vedanta Aluminium, Vedanta Oil and Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals and Vedanta Ltd. Existing shareholders will receive an additional share of each newly listed entity for one share of Vedanta.
