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Debt on Vedanta: Billionaire Anil Agarwal’s company Vedanta Resources still has to repay a huge amount of debt. For which the company is considering a special plan, so that the loan amount can be repaid ahead of time.
The total loan repayment due in FY 2024 was about $ 4.2 billion, out of which the company has repaid $ 2 billion of debt and is yet to repay the debt of $ 2.2 billion. Of the $2.2 billion, $1.3 billion is interest and other amounts.
Vedanta’s plan to repay the loan
According to ET’s report, Vedanta Resources is now largely dependent on monetization, refinance and transfer of general reserves to Brand A to repay the $2.2 billion loan. On the other hand, to meet the requirement of loan repayment, the share of royalty from Vedanta Limited has also increased from 2% to 3% this year.
Keeping an eye on brand monetization and refinance
Refinancing the Oaktree Bucket is one of the many options to repay the loan. Oaktree Bucket refers to Country Capital Management, which is engaged in refinancing with three subsidiaries of Vedanta Limited – Finsiders International, WestGlobe Limited and Vedanta Holdings Mauritius. Let us tell you that earlier in 2020, $ 1 billion was borrowed from Oaktree Bucket. At the same time, the company also wants to raise money by monetizing its brand.
This is also an option to raise money
Apart from these two options, the company has the option to stream up the dividend from its subsidiaries. Earlier this quarter, Vedanta Resources raised $850 million in debt from JP Morgan and Oaktree in Zinc International, a wholly owned subsidiary of Vedanta Limited. Its duration is 36 months, out of which almost 24 months have been completed.
$413 million brand fee to the company
Earlier this month, Vedanta Resources Ltd informed investors that it has entered into a similar royalty deal with Hindustan Zinc, in which the royalty share has been fixed at 1.7 per cent. The company has received brand fee of $413 million during the current financial year.
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