The shares of Vedanta fell for the fourth consecutive session on Tuesday, with the stock dipping to a five-month low over the uncertainty of the plan to sell its international zinc business to Hindustan Zinc Ltd (HZL) and bring down its huge debt.
The government has opposed the proposal even as S&P Global Ratings had earlier warned the ratings of parent Vedanta Resources “may come under pressure” if it is unable to raise $2 billion and/or sell its international zinc assets.
The Vedanta share on Tuesday crashed 6.58 per cent or Rs 18.90 to end at Rs 268.45 on the BSE. During intra-day trades, it hit a five-month low of Rs 262. Over the past four sessions, it has dropped almost 11 per cent. The bearish sentiment comes in the wake of the Centre opposing Vedanta Ltd’s proposed sale of its international zinc business to HZL for $2.98 billion over concerns about valuation.
The government has also threatened to take legal action to stop the sale of the Africa-based assets to HZL, in which it holds a 29.54 per cent stake.
Fears allayed
Billionaire Anil Agarwal’s Vedanta Resources Ltd on Tuesday said it has enough means to meet its debt repayment liabilities in the coming quarters as it looked to assuage investor concerns around its financial position.
In a statement, the firm, which is the majority owner of Mumbai-listed mining and oil and gas company Vedanta Ltd, said it is in the advanced stage of finalisation to tie up $1.75 billion through a combination of syndicate loan and bilateral bank facilities.
Vedanta Resources said it has pre-paid all of its debt that was due for repayment till March 2023, deleveraging by $ 2 billion in the past 11 months. Further, it is confident of meeting its liquidity requirements for the quarter ending June 2023. Vedanta, it said, continues to deliver healthy cash flows and does not have any pledge except 6.8 per cent of HZL shares.