On Thursday, Vedanta shares closed at Rs 279.75, on the National Stock Exchange, 0.64 per cent lower than the previous close. Meanwhile, Hindustan Zinc shares rose 0.79 per cent to Rs 327 apiece.
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New Delhi: In order to raise Rs 1,500 crore in loans against those shares at more than 50 per cent margin to their market value, billionaire Anil Agarwal-led Vedanta Resources has encumbered a part of its stake in Hindustan Zinc (HZL), the company told the exchanges in a mandatory filing Thursday.
The note to the exchanges said that the shares, amounting to 2.44 per cent of HZL’s total share capital, are worth about Rs 3,300 crore.
Axis Trustee Services is acting as the facility agent for the loan and the encumbrance has been created in the favour of financial institution. The note added that the capital borrowed will be used for “general business purposes, including repayment of existing debt, capital expenditures and operating expenses.”
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On Thursday, Vedanta shares closed at Rs 279.75, on the National Stock Exchange, 0.64 per cent lower than the previous close. Meanwhile, Hindustan Zinc shares rose 0.79 per cent to Rs 327 apiece.
After Vedanta’s latest move, 91.35 per cent of the promoter stake in HZL has now been encumbered across four different encumbrance transactions, as per the latest data. Meanwhile, the entire promoter holding in Vedanta has been encumbered.
Vedanta To Raise Rs 2,100 Crore Through Private Placement of NCDs
The board of Vedanta Ltd last week agreed to issuing of non-convertible debentures (NCDs) worth up to Rs 2,100 crore on a private placement basis.
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“Pursuant to the provisions of Regulations 30 and 51 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) read with Para A of Part A of Schedule III of the Listing Regulations, we hereby inform that the duly authorized Committee of Directors at its meeting held today i.e., Thursday, April 13, 2023, considered and approved for raising, on a private placement basis, up to 21,000 nos. Secured, Unrated, Unlisted, Redeemable, Non‐Convertible Debentures (“NCDs”) of face value ₹10,00,000/‐ each aggregating up to ₹2,100 Crores in one or more tranche(s),” said Vedanta in a stock exchange filing.
It should be noted that the multiple fundraises from the mining and resources major come at a time when its London-based parent Vedanta Resources (VRL) is scouting for capital to meet upcoming debt obligations.
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VRL has near-term maturities of around $1.7 billion (Rs 13,885 crore) in the first quarter of FY24, as per a recent report from Crisil Ratings.
In FY 23, Vedanta gave out a record Rs 37,730 crore as dividends in FY23 to support its cash-strapped parent VRL, raising concerns in the analyst and credit rating communities.
Financial industry watchers have cautioned that the leverage of Vedanta and Hindustan Zinc may go up in light of the high dividend outflows.
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Last month, Crisil Ratings revised its outlook for Vedanta to ‘negative’ from ‘stable’, while reaffirming its rating of CRISIL AA on expectations of higher debt on the company’s books.
