vedanta resources: Vedanta Resources reduced its net debt by $ 300 million in the first half of fiscal 22

Vedanta Resources Ltd (VRL), the parent company of Indian listed entity Vedanta Ltd, reduced its net debt by around $ 300 million in the first half of FY22 and plans to further reduce its debt by around $ 500. million dollars over the next semester.

“Vedanta Resources believes that the strong operational performance of our world-class asset base will strengthen our balance sheet and lead to investment-grade credit metrics,” VRL said in a statement Monday.

With the full repayment of Volcan’s debt, the collateral on all VRL shares has been released, the company said in the statement.

Vedanta Resources was delisted from the London Stock Exchange in October 2018 and is now 100% owned by Volcan Investments Ltd, an investment arm of Chairman Anil Agarwal. Anil Agarwal and his family are the main shareholders of Volcan.

The board of directors of Vedanta Ltd, headed by Anil Agarwal, last week approved an interim dividend of? 18.50 per share. The total payout was around Rs 6,877 crore. Receipt of dividends into the hands of the holding company, Vedanta Resources Ltd, was estimated to contribute to debt reduction of around Rs 4,482 crore.

Vedanta Resources holds 65.18% of the capital of its subsidiary Vedanta Ltd as of June 30, 2021 against 55.1%, following an open offer financed by debt.

Moody’s, in its recent rating report, changed the outlook for Vedanta Resources from negative to stable. According to the August 23 report, VRL’s debt was approximately $ 8.6 billion.

“Approximately US $ 3.1 billion of Vedanta Resources’ $ 8.6 billion debt is issued to intermediary holding companies with guarantees from Twinstar Holdings and Welter Holdings, which collectively hold a 44.63% stake in Vedanta Ltd, “the report says.

Ann J. Cox