Billionaire Anil Agarwal’s Singapore-listed holding company Vedanta Resources Ltd (VRL), which controls the domestic metals and mining conglomerate, Vedanta Ltd, will struggle to cover its cash requirement in the January-March quarter, said a report by global credit ratings agency Moody’s. The cash shortfall will deteriorate further through September 2022, it said.
Large upcoming debt maturities and VRL’s negative free cash flow in FY21 also increase the risk that it might run out of liquidity, Moody’s said.
Credit analysts are focusing on the $7.5 billion debt, which is about 50% of the group’s total consolidated debt due in March 2022. It includes $2.5 billion for VRL and $425 million for VRL’s sole shareholder Volcan Investments Ltd. “Without operations of its own, VRL’s need to refinance debt maturities at a time of tight capital market liquidity puts undue pressure on key subsidiaries to upstream cash,” said the report by Moody’s.
