Anil Agarwal’s Vedanta Resources Secures Upgrade From S&P Global - Here’s Why

S&P Global Ratings has upgraded Vedanta Resources to "B" from "B-", citing the company's successful attainment of the minimum support needed for a debt restructuring plan. The upgrade signals reduced refinancing risks for some of its bonds and reflects an improvement in its capital structure.

Key Developments In Vedanta Resources 

Earlier this week, Vedanta Resources, the parent company of mining giant Vedanta Ltd, secured approval for a restructuring plan. This plan eliminates a clause that could have accelerated the maturity of bonds due in January 2027 and December 2028, shifting their maturity date to April 20, 2026.

The upgrade marks S&P Global’s third rating improvement for Vedanta Resources this year, aligning with Moody’s decision to upgrade the company last month.

Debt Reduction Efforts

Vedanta Resources has been actively working to strengthen its finances through measures such as debt restructuring. Group Chairman Anil Agarwal has made several attempts to reduce the company’s debt burden, including an unsuccessful bid to privatise Vedanta in 2020 and plans to split the company into six separate entities.

Stable Outlook

S&P Global maintained a "stable" outlook for Vedanta Resources, citing expectations of more manageable refinancing risks moving forward. Analysts noted that the approval of the consent solicitation addresses the residual risk of accelerated bond maturity stemming from a US$400 million shortfall in the company’s most recent bond issuance.

"In our opinion, the passing of the consent solicitation eliminates the residual risk of an accelerated maturity following a $400 million shortfall in Vedanta Resources' most recent bond raising," S&P Global analysts stated in their note.

This development underscores Vedanta Resources’ ongoing efforts to stabilise its financial standing and strengthen its position in the global market.

(With Reuters inputs)