Vedanta’s Anil Agarwal said to weigh stake sale as last-resort option


According to persons familiar with the situation, Indian entrepreneur Anil Agarwal is researching measures to reduce the enormous debt load weighing down his commodities business empire, including selling a minority investment in Vedanta Ltd.

Those who spoke on the condition of anonymity because the information is confidential stated that Agarwal is considering the prospect of selling a less than 5% interest in the Mumbai-listed company. Vedanta has a market worth of roughly $12.6 billion after its shares have decreased by about 32% over the past year. 5% ownership is equal to around $630 million. According to the sources, the billionaire will only consider selling a stake in Vedanta as a last resort if all other means of generating money prove unsuccessful.

According to a story from Bloomberg News earlier this month, Agarwal’s Vedanta Resources Ltd., which controls approximately 70% of Vedanta, has been in contact with at least three banks regarding a loan that might total $1 billion. According to the persons, conversations are still ongoing and no decisions have been taken in regards to the loan.

“Any notion of selling a share in Vedanta Ltd. is false and without foundation, “In response to a question from Bloomberg News, a spokeswoman for the businesses stated.

According to a Bloomberg Intelligence report, Vedanta Resources may rely on dividends from its subsidiary Hindustan Zinc Ltd. to help repay the $400 million in dollar-denominated bonds due in April. On Tuesday, Hindustan Zinc announced that it would distribute an interim dividend of 26 rupees per share, or around 110 billion rupees ($1.3 billion), to shareholders.

Globally rising interest rates have put pressure on debtors with low credit ratings who have large debt loads, like Vedanta. The Vedanta Group and its affiliate Hindustan Zinc reached an agreement in January to sell a zinc manufacturing company for $2.98 billion over 18 months. Hindustan Zinc is owned by the Indian government, which is adamantly opposed to the deal.

Vedanta Resources said in a February filing with the exchange that it had reduced its net debt from $7.7 billion to $2 billion in the current fiscal year and will continue to do so in the following two fiscal years.

Agarwal, a self-made millionaire, wanted to diversify his company empire into a conglomerate focused on resources like BHP Group Inc. Prior to 2019, when he sold his stock because his gains were “achieved even sooner than projected,” he was Anglo American Plc’s largest shareholder.” In 2020, he attempted but failed to take the financially robust Vedanta private. The Mumbai-listed business and Agarwal’s privately held Vedanta Resources were then discussed as a possible merger, according to a 2017 article by Bloomberg News.

Agarwal made his money through a string of risky buys. In 2001, he took over the government-owned Bharat Aluminium Co., putting India’s efforts to sell off state-owned assets to the test. He then bought Hindustan Zinc, a different government organisation. Despite lacking any prior oil and gas experience, he was successful in his bids for Cairn India and Sesa Goa Ltd., which at the time was India’s largest iron ore producer.