Anil Agarwal looks at selling minority stake in Vedanta

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Anil Agarwal looks at selling minority stake in Vedanta

Mining mogul Anil Agarwal is said to be looking at the sale of a minority stake in Mumbai-listed Vedanta Ltd. in a bid to reduce his business empire's debt load, a Bloomberg News report said on Thursday.

The report said Agarwal is looking at demonetizing a less than 5 per cent stake in the Mumbai-listed company. A stake sale in Vedanta is considered a last option for the mining billionaire and will only be considered if other fundraising options fail, according to people familiar with the development, according to people familiar with the development.

Agarwal s Vedanta Resources Ltd., which owns about 70 percent of Vedanta, has been in talks with three banks for a loan of as much as $1 billion, Bloomberg News reported earlier this month. The people said that the discussions are ongoing and no final decisions have been made on the loan.

Anil Agarwal-led Hindustan Zinc announced its fourth interim dividend for FY 23 on Tuesday via an exchange filing. The company said it will offer a dividend of 26 per share, totalling Rs 10,986 crore. This is in addition to the 13 per share dividend that the metals and mining company announced in January, Rs 15.50 per share dividend it paid in November and Rs 21 interim dividend it went for in July last year. In FY 23 Hindustan Zinc has announced a 75.50 per share dividend.

The Centre, which holds around 30 per cent of Hindustan Zinc, will be the beneficiary of the deal, according to Agarwal s Vedanta Ltd. Vedanta Resources Ltd. is the ultimate holding company in London. The dividends announced by Vedanta will help Vedanta earn Rs 7,132 crore in dividends on 2,74, 31,54, 310 shares it held in the company as of December-end.

This extra amount would bring some respite to Agarwal, who has been planning different ways to clear his debt obligations after the Centre opposed its plans to sell the group's international zinc operations to Hindustan Zinc Limited HZL for $3 billion. Vedanta Resources has a net debt of $7.7 billion. HZL was privatised more than two decades ago.

A week ago, Vedanta Resources repaid $250 million in loans that the company took from Barclays Bank and Standard Chartered Bank.

Between April and June this year, Vedanta Resources needs to service around $2 billion in Rs 16,510 crore of debt, according to the S&P report. The rating agency said that Vedanta Resources' ability to meet its financial obligations beyond September would depend on the planned $2 billion fundraising and the proposed sale of Vedanta's zinc assets in Africa.

Vedanta Resources has upcoming bond repayments of $400 million in April, followed by another $500 million in May this year.

The rating agency warned that if Vedanta Resources fails to raise new debt or sell assets to Hindustan Zinc, its ratings would come under pressure.

Vedanta Resources will be able to meet its obligations from internal accruals, but it could face a crunch if it fails to raise funds, S&P said in its note.