Vedanta Resources plans early repayment of private credit facility; seeks investor consent amid refinancing efforts

Mumbai, July 31, 2025 Vedanta Resources Ltd (VRL), the parent company of Vedanta Ltd, is seeking investor approval to prepay $550 million of a private credit facility (PCF) raised in December 2023. The company is currently in talks to raise $700 million from global lenders including Barclays, Abu Dhabi Commercial Bank, First Abu Dhabi Bank, Mashreq, and Sumitomo Mitsui Banking Corporation.

The prepayment forms part of a broader strategy to reduce debt and manage liabilities more efficiently. The PCF, maturing in April 2026, had initially raised $1.25 billion and was guaranteed by Vedanta Ltd through secured assets and cash flows.

To proceed with the repayment, Vedanta needs the approval of at least two-thirds of the PCF investors. Among them are prominent firms such as Cerberus Capital, Davidson Kempner, Varde Partners, Broad Peak, BlackRock, SeaTown Holdings, and Aspex Management.

The revised terms of the new borrowing facility are expected to be significantly more favorable, with interest pegged at SOFR + 400–500 basis points a notable reduction from the previous rate of approximately 18% coupon.

Vedanta’s strategy hinges on accessing cheaper capital as it seeks to refinance existing obligations and prepare for upcoming maturities. In FY25, VRL faces debt obligations exceeding $1 billion, with high-yield bonds maturing and upcoming amortization schedules.

The company plans to lengthen bond maturities and lower interest outflows, targeting a reduction in net debt-to-EBITDA ratio to 2.7x over the next few quarters. Vedanta has been heavily reliant on dividends from its Indian unit to service offshore debt, a trend expected to continue.

Earlier this month, Vedanta also explored new short-term credit lines to bridge upcoming obligations. Analysts suggest the group remains vulnerable to volatility in commodity markets and policy changes in India.

Source