Standard & Poor's Ratings Services has said that it has assigned 'BB' issue rating to a $1.2-billion senior secured term loan facility (term loan A), guaranteed by Vedanta Resources Plc.
Twin Star Mauritius Holdings Ltd., a wholly owned subsidiary of Vedanta, issued the loan. Vedanta used the proceeds from the loan to refinance the debt it had borrowed for the acquisition of Cairn India Ltd.
The rating agency further said: “we believe risks related to the company's India operations remain high.
Vedanta's ‘aggressive’ financial risk profile reflects our view of the company's debt-funded growth and financial strategy that places much of its debt, but very limited cash, at the holding company”.
S&P observed that Vedanta's performance in the fiscal year ended March 31, 2013, was in line with its expectations, with strong EBITDA generation at Cairn.
>jayanta.mallick@thehindu.co.in
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