Anil Agarwal-controlled Vedanta Ltd asked the Reserve Bank of India to provide guarantees for a $1 billion loan that it intends to raise through one of Vedanta's overseas subsidiaries.
The loan will be raised through THL Zinc Ventures, a Mauritius-based wholly owned subsidiary of Vedanta Limited. Vedanta Group is in talks with JP Morgan, Barclays, Standard Chartered and Deutsche Bank for a $1 billion loan, according to the report.
The funds, which will be raised in the process, are expected to be upstreamed to Vedanta Resources Ltd, a group based in London.
The banks sought 800 basis points over the secured overnight financing rate SOFR. Anil Agarwal-led group has been asking for the loan at a lower rate. The current SOFR is 4.55 per cent.
SOFR is the benchmark interest rate at which major global banks lend to one another in the international interbank market for short-term loans.
Earlier this week, it was reported that Agarwal was looking at the sale of a minority stake in Mumbai - listed Vedanta Ltd. in a bid to reduce his business empire's debt load. The report said that a stake sale in Vedanta is a last option for the mining billionaire and will only be considered if other fundraising options fail, people familiar with the development told Bloomberg News.
The main holding company, VRL, has $400 million of dollar bonds due in April and $500 million dollar bonds in May. Besides that, the holding company has $1.1 billion in debt and $600 million in interest payments coming up, along with $450 million of inter-company loans.
Vedanta Resources repaid $250 million in loans that it took from Barclays Bank and Standard Chartered Bank last week.
The group has been servicing debt through loans and dividends from operating companies, such as VDL and Hindustan Zinc Ltd HZL. On March 21, Hindustan Zinc announced its fourth interim dividend for FY 23. The company said it will offer a dividend of Rs 26, per share, totalling Rs 10,986 crore.
VDL and HZL have announced a record four dividends this financial year.