Vedanta Resources Bags $600 Million Loan for Refinancing Private Debt

Vedanta Resources Limited (VRL), the London-based parent of Mumbai-listed Vedanta Ltd, has secured a term loan of up to $600 million to refinance a high-cost private credit facility. The move forms part of the company’s ongoing efforts to strengthen its debt structure and overall financial position. In a note to bondholders, VRL stated that the refinancing is set to lower interest costs significantly and extend debt maturities. 

The first tranche of $380 million has already been committed by a group of banks from the Gulf, Japan, and Europe—including First Abu Dhabi Bank, Mashreq, Sumitomo Mitsui Banking Corp, and Standard Chartered. The remaining $220 million is expected to be finalised soon.

Financial Gains and Strategic Flexibility

The loan facility has a door-to-door tenor of just over 4 years and an average maturity of three years. It is priced at the Secured Overnight Financing Rate (SOFR) plus 450 basis points. Vedanta expects annual interest savings of around $50 million from the restructuring, a more than 900 basis point drop in borrowing costs compared to its previous private credit deal.

The company’s communication highlighted that this transaction reflects continued confidence from global financial institutions in Vedanta’s credit quality and long-term direction. 

Debt Reduction Progress and Operational Context

As of March 2025, Vedanta Resources had reduced its debt to a decade low of $4.9 billion, cutting over $4 billion in the past 3 years. In FY25 alone, the group lowered its debt by $1.2 billion: $700 million at VRL and $500 million at its Indian unit, Vedanta Ltd. 

In a recent earnings call, the company stated it now holds a healthier net debt-to-EBITDA ratio than many global peers. VRL also refinanced its entire $3.1 billion bond exposure in recent quarters, smoothing its maturity profile, extending average terms beyond 8 years, and cutting its average coupon rate by 250 basis points, easing cash flow pressure.

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Vedanta Ltd Share Price Performance 

As of June 25, 2025, at 12:20 PM, Vedanta share price is trading at ₹440.40 per share, reflecting a decline of 1.21%. Over the past month, the stock has gained 0.97%. 

Conclusion

Vedanta Resources $600 million loan arrangement is a notable step in reshaping its financial structure. With interest savings, improved credit outlook, and reduced leverage, the move reflects a clear shift towards prudent financial management. 

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