Vedanta Resources said on Wednesday it had brought down debt significantly, seeking to allay market concerns after S&P Global Ratings last week raised doubts about its ability to meet financial obligations beyond September.
The billionaire Anil Agarwal-owned company - parent of Indian resources giant Vedanta Ltd - said it had cut net debt by $2 billion in the last 11 months, ahead of its own target.
S&P Global Ratings said on Feb. 8 that while the company was likely to meet its obligations until September, liquidity beyond that would depend on critical fund-raising and proposed sale of international zinc assets by Vedanta Ltd to Hindustan Zinc.
Vedanta Resources said on Wednesday it has healthy cash flow boosted by robust domestic consumption and that growth would be propelled by its associate firms' investments into semiconductors, display glass, renewables, optical fibre, and transmission.
The London-based company also said it plans to cover 50% of its liquidity requirements for fiscal 2024 internally and the rest through refinancing.
Vedanta Resources' statement also comes at a time when Indian conglomerate Adani Group is still battling the fallout from a U.S. short-seller's critical report on its business practices that has wiped off $120 billion from its market value.
Vedanta Ltd, which mines zinc, silver and aluminium and drills for crude, reported a 41% slump in third-quarter profit in January, hit by a fall in commodity prices.
In its report, S&P said its rating on Vedanta Resources was likely to come under immediate pressure if a planned $2 billion fund raise and a sale of assets did not progress over the coming weeks.
The ratings agency added that the group would be left with about $500 million after repayments in the absence of external funding.
In 2020, Vedanta Resources failed to take Vedanta Ltd private as it did not get the required number of shares needed to buy back.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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