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Vedanta Resources to Slash $3 Billion in Debt Over Three Years

2024-06-19

Vedanta Resources, the UK-based parent company of Indian miner Vedanta Ltd, announced plans to reduce its debt by $3 billion over the next three years. Chairman Anil Agarwal revealed the ambitious deleveraging target in the company?s latest annual report released.

As of March 2024, Vedanta Resources carried a debt load of $6 billion. The company has faced several rating downgrades over the past year due to liquidity concerns and a heightened risk of default, raising alarms among analysts and investors.

"We seek to further deleverage Vedanta Resources by $3 billion over the next three years," Agarwal stated, highlighting the firm?s commitment to improving its financial health. This follows a significant debt reduction of $3.70 billion achieved over the last two years.

Agarwal also noted that the extension of the maturity of outstanding bonds worth $3.20 billion until fiscal 2029 has afforded the company "newfound liquidity." This enhanced liquidity is earmarked for "important capex projects," supporting the conglomerate?s strategic growth initiatives.

Vedanta Ltd, currently undergoing a planned demerger, is focusing on the operationalisation of coal blocks and expanding its steel and aluminium production capacities. The company has proposed a capital expenditure budget of $1.90 billion for fiscal 2025 to support these expansions.

As Vedanta Resources embarks on this significant debt reduction journey, it aims to strengthen its financial stability and sustain long-term growth amid a challenging economic environment.