Vedanta reportedly seeking $1 billion loan via Mauritius-based subsidiary

Several big names such As Anil Ambani and the man behind Big Bazaar and Pantaloons Kishore Biyani have lost fortunes after falling in a debt trap. Indian firms borrowing too much for their capacity to repay remains a concern after the Adani Group was called overleveraged and has been prepaying loans to win back investor confidence.

Another firm which recently reassured investors about going debt-free in the medium-term, Vedanta is reportedly eyeing another $1 billion loan.

More debts to clear all debts?

Reports of the mining conglomerate seeking a nod from the Securities and Exchange Board of India (SEBI) to borrow more, come after it dismissed the possibility of selling a 5 per cent stake.

The $1 billion loan to be raised through a Mauritius-based subsidiary THL Zinc Ventures, will be upstreamed to holding firm Vedanta resources in London.

Vedanta has repaid a $250 million debt slated for maturity in March, and seeks $1 billion from JP Morgan, Barclays, Standard Chartered and Deutsche Bank for payments due in May.

High debt and the Mauritius connection

Vedanta currently has a debt of almost $12 billion, but has reassured investors since its still below $13 billion.

Funds flowing through Mauritius-based firms, after Adani's offshore companies in the nation, were named as key facilitators for alleged fraud according to the Hindenburg report.

The firm, which signed an MoU to set up a microchip plant in Gujarat with Foxconn, was also said to be struggling to raise funds for the same.

But it denied the reports and claimed that negotiations are underway with investors who are on board.

Published on: Saturday, March 25, 2023, 04:33 PM IST