Vedanta Pares Net Debt By $2 Billion In FY23 As Funding Woes Persist

Vedanta has achieved half of its three-year planned reduction commitment of $4 billion in the first year

Vedanta will continue to deleverage from net debt of $7.7 billion in the next two financial years.

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Oil-to-metal conglomerate billionaire Anil Agarwal‘s Vedanta Resources has slashed net debt by $2 billion in the current financial year as it seeks to soothe investor concern over its liquidity and ability to repay upcoming obligations, as reported by news agency Bloomberg.

The commodities giant has achieved half of its three-year planned reduction commitment of $4 billion in the first year, the London-based company said in an exchange filing. It will continue to deleverage from net debt of $7.7 billion in the next two financial years, it said.

According to the report, the move comes after S&P Global Ratings last week flagged the company’s debt scores may “come under pressure” if it’s unable to raise $2 billion and/or sell its international zinc assets. In the absence of a significant fundraising, Vedanta Resources will be left with very little cash, the assessor said, adding that external funding “critical” for debt maturities after September.

The company plans to cover half of next financial year’s liquidity requirements internally and the rest through refinancing, according to the statement. The commodities firm is delivering healthy cash flows powered by robust Indian consumption, it said.

Meanwhile, Vedanta Ltd posted a loss of 40.8 per cent in consolidated net profit at Rs 2,464 crore for the third quarter ending December 2022. According to the company’s filing with the BSE, Vedanta had a consolidated net profit of Rs 4,164 crore in the year-ago period.

According to the company's exchange filing, operating revenue totalled Rs 33,691 crore, a 0.01 per cent decrease from Rs 33,697 crore in the same quarter of previous fiscal year. The Board of Directors of the Company also approved the fourth interim dividend of Rs 12.50 per equity share amounting to Rs 4,647 crore. The record date for the payment is February 4, 2023.

Sunil Duggal, Vedanta's chief executive officer said, "We have delivered a good set of financial results and sustained operational performance in a challenging macroeconomic climate."

The consolidated income of the company in the October-December period increased marginally by 0.4 per cent to Rs 34,818 crore from Rs 34,674 crore in the year-ago period