Vedanta Resources Ltd.
Mining tycoon Anil Agarwal is considering a stake sale in Vedanta as a last resort, Bloomberg reported on Thursday. However, firm leaders have disputed it.
A spokesman for the firms stated, “Any talks of stake sales in Vedanta Ltd. are untrue and baseless”.
Vedanta shares plummeted as much as 6.3% after the announcement on Thursday, reaching their lowest level since early March, before recovering some of their losses.
According to the article, Agarwal is considering selling a less than 5% interest in the Mumbai-listed company. A 5% share is worth approximately $630 million. According to the source, a stake sale in Vedanta is a last resort for the billionaire and will be explored only if other funding methods fail.
Vedanta Resources has hired Cantor Fitzgerald, a US financial services business, to syndicate loans worth up to $2 billion to satisfy its short-term debt maturities.
Hindustan Zinc, situated in Rajasthan, is slated to pay an interim dividend of 26 rupees per share, according to an exchange filing on Tuesday.
Agarwal’s Vedanta Ltd., which owns over 65% of Hindustan Zinc, and the Indian government, which controls approximately 30%, will be the primary benefactors. The ultimate holding company is Vedanta Resources Ltd., situated in London.
The additional funds would provide some respite to Agarwal, who has been forced to rely increasingly on dividends after the Indian government objected to his plan to sell the group’s overseas zinc business to Hindustan Zinc for approximately $3 billion.
According to regulatory documents, Vedanta Resources recently repaid $250 million in loans from Barclays Bank and Standard Chartered Bank.
As part of its efforts to ease investor concerns about its financial status, the company previously stated that it had sufficient resources to meet debt repayment obligations in future quarters.
Vedanta Resources Limited announced last month that it is in the advanced stages of finalizing a USD 1.75 billion syndicated loan and bilateral bank facility.
The corporation stated that it had pre-paid all debt due for repayment until March 2023, deleveraging by USD 2 billion in the previous 11 months.
Furthermore, it is certain that it will be able to meet its liquidity needs for the quarter ending in June 2023.
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