Anil Agarwal-led Vedanta has pledged 2.44 per cent of its stake in group company Hindustan Zinc to raise ₹1,500 crore.
The company, which is struggling to meet its debt obligation, has pledged 10.32 crore shares through Axis Trustee Services as facility agent, said a statement. Vedanta, which owns 64.92 per cent in Hindustan Zinc, has raised ₹39,000 crore by pledging 59.31 per cent of its holding. Earlier, it had pledged 56.87 per cent of the stake with the Union Bank of India.
Vedanta plans to use the proceeds for general business purposes, including repayment of existing debt, capital expenditures and operating expenses. The company has entered into a term loan agreement under which one of the security covers includes pledging shares of Hindustan Zinc.
Also read: Hindustan Zinc announces fourth interim dividend of ₹26 per share
Both Vedanta and Hindustan Zinc had declared dividends worth ₹69,300 crore in FY23. Earlier this year, the company tried to sell its global zinc assets to Hindustan Zinc for a cash consideration of $2.98 billion, but it was scuttled by the Centre which owns 29.52 per cent stake in Hindustan Zinc.
Debt picture
The Vedanta group’s net debt after adjusting the cash component of $3.5 billion was about $11.8 billion. Last year, Vedanta Resources reduced its debt burden to $7.7 billion. VRL has external debt maturities of about $3.8 billion, $450 million of an intercompany loan and an annual interest bill of about $600 million.
VRL is purely a holding company without any operations. It relies on dividends from operating subsidiaries and banks for funding, as cross-border capital markets are expected to remain very challenging.