S&P Global Ratings revises outlook to negative for Vedanta Resources

On Thursday, S&P Global Ratings changed Vedanta Resources' outlook from "stable" to "negative," citing elevated funding concerns. Vedanta Resources is the parent company of the Indian metals-to-oil giant Vedanta Ltd.

The rating agency claimed that the company, owned by billionaire Anil Agarwal, has "weakened access" to cash flow from its operating units due to difficult external financing conditions, which increased its risk of refinancing.

According to S&P, the company's financing gap is expected to reach $2 billion until August 2024. This funding gap is a result of the company's limited liquidity caused by significant debt maturities until March 2025.

Vedanta Resources can pay off about half of its $3 billion debt maturities and interest expenses of $650 million with the funds raised by selling part of its stake in 64%-owned Vedanta Ltd, along with dividends and brand fees, the rating agency said.

The company may need to obtain at least $600 million before its $1 billion bond matures in January and the remainder by August 2024 in order to pay the remaining obligations, it added.

Source: Media Reports