Vedanta Unveils ₹30,960 Crore Debt Recast, ₹2,580 Crore Buyback Move Ahead Of Demerger Listing
· Free Press Journal
Mumbai: Vedanta Resources has announced a bond buyback programme worth around Rs 30,960 crore to strengthen its balance sheet and reduce borrowing costs. The initiative is the first phase of the company's larger Rs 46,400 crore refinancing plan.
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The announcement comes ahead of key developments in Vedanta's demerger process. Market experts believe the move may have a direct impact on investor sentiment and Vedanta shares when markets open on Monday, June 15.
Anil Agarwal’s ₹43,500 Crore Refinancing Masterstroke, Vedanta Targets 5.2 Billion Dollar Debt Overhaul As Financial Strength ImprovesWhat Is the Bond Buyback Programme?
Under the programme, Vedanta Resources will repurchase its existing bonds and replace them with newly issued bonds. The objective is to swap older, high-interest debt for fresh borrowings carrying lower interest rates.
The offer will remain open until June 23. Meanwhile, the company is meeting investors in London, Boston and New York to raise funds through new bond issuances.
Global banks, including Citigroup, JPMorgan Chase and Barclays, are assisting the company in the refinancing process.
Rating Upgrades Open Door to Cheaper Funding
Vedanta's financial position has improved in recent months due to stronger commodity prices and better business performance.
Recently, ICRA upgraded the long-term ratings of major Vedanta Group companies to AA+, the highest level achieved by the group in more than a decade.
Wealth Destruction? Why Vedanta Stock Is Down 65% TodayGlobal rating agencies such as Moody's Ratings, S&P Global Ratings and Fitch Ratings have also upgraded Vedanta Resources in recent months.
Rs 2,580 Crore Extra Cost Today, Bigger Savings Tomorrow
To buy back the old bonds, Vedanta may have to spend an additional Rs 2,580 crore, as many of its bonds are currently trading above their original value in the market.
However, the company expects the refinancing exercise to lower interest costs by around three percentage points. This could generate significant savings over the coming years.
Analysts say the move is aimed not only at refinancing debt but also at reducing borrowing costs, extending repayment schedules and strengthening the company's financial position. In addition, Vedanta is arranging funds to meet another Rs 15,480 crore of debt obligations separately.