08 Feb , 2024 By : Debdeep Gupta
Vedanta promoters can sell, and dispose of shares as lender lifts restrictions, The company's promoter Anil Agarwal had pledged the mining company's stake from 2020 onwards in a bid to raise funds. According to the filing, the promoters had pledged 63.71% of the shares
The promoters of Vedanta Ltd can sell or dispose of their shares in the mining company after a charge created by its lender, OCM Verde Xi Investments, has been released, exchange filings showed on Thursday. The move comes as the mining major looks to shore up its cash flow amid debt obligations.
Promoter Anil Agarwal had pledged the mining company's stake from 2020 onwards in a bid to raise funds. According to the filing, the promoters had pledged 63.71 percent of shares.
Following this, Vedanta group promoter entities - Vedanta Holdings Mauritius, Finsider International Company (FICL), Vedanta Resources, and Westglobe - were barred from selling, transferring, or disposing of issued shares held in Vedanta Ltd due to the OCM charge.
OCM Verde is an entity under asset manager Oaktree Capital.
On February 7, Vedanta Holdings Mauritius II Limited (VHML II) executed a global release deed with OCM and an Indian release deed with Axis Trustee Services Limited, according to the filing uploaded on February 8. The release will allow the promoters to sell or dispose of the shares.
The development will boost the company's efforts to increase cash flow amid the mounting debt situation. As of December 31, 2023, the company's net debt stands at Rs 62,493 crore. The company recently restructured its debt worth $3.2 billion and the move was approved by more than 97 percent of its bondholders.
The mining conglomerate is also looking to sell its non-core assets. Through the sale of iron ore mines and steel plants, the company looks to repay its lenders, according to reports.
In the October-December quarter, Vedanta posted an 18 percent fall in net profit burdened by finance costs. Its finance costs surged more than 50 percent to Rs 2,417 crore due to higher borrowing costs.
Aggarwal, however, remains confident of managing the debt. The company has raised $1.3 billion through loans and is also betting on dividends, royalties, and cash raised from the sale of non-core assets to repay lenders.
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