Vedanta Resources is in talks with Standard Chartered Bank for a loan of $1.2 billion to $1.3 billion against brand fee receivables without any restructuring pre-conditions. The loan deal, if sealed, will take care of debt repayments until January without the need to restructure the bonds. The discussions regarding lending rates are currently in progress and the loan could be priced around 14-15% with a duration of three years.
This move by Vedanta Resources is significant as it shows the company’s willingness to take on debt to meet its financial obligations. The loan deal with Standard Chartered Bank, if successful, will provide Vedanta Resources with the necessary funds to meet its debt repayments until January without having to restructure its bonds. This will provide the company with some breathing room and allow it to focus on its operations.
The fact that Vedanta Resources is seeking a loan against brand fee receivables without any restructuring pre-conditions is also noteworthy. This indicates that the company is confident in its ability to repay the loan and is not seeking any concessions from its lenders.
The discussions regarding lending rates are ongoing and it remains to be seen what the final terms of the loan will be. However, if the loan is priced around 14-15% with a duration of three years, it will provide Vedanta Resources with a relatively low-cost source of funding.