Vedanta Resources Ltd.

Overview Key strengths Key risks Strong competitive position in the zinc business and significantly improved profitability in the aluminum business Large debt maturities at the Vedanta Resources level over the next three years and high refinancing risk weaken liquidity. Oil business, while small in scale but cost competitive, offers diversification away from metals Inefficient corporate structure with a highly leveraged holding company that has dividend from subsidiaries as main source of cash flow. Record of managing through different commodity cycles High dependence on capital and commodity markets to support liquidity. Vedanta Resources has an unfavorable capital structure with most of its debt due in the next three years. The company has US$2.5 billion-US$3.0 billion of debt maturing annually between fiscal

...Large debt maturities at Vedanta Resources Ltd. level constrain the rating. Vedanta Resources has an unfavorable capital structure with most of its debt due in the next three years. The company has US$2.5 billion-US$3.0 billion of debt maturing annually between fiscal 2023 (year ending March 31, 2023) and fiscal 2025, including repayment of intercompany loans. In addition, it has annual interest expenses of about US$700-800 million. This exposes the company to high refinancing risk. We believe Vedanta Resources will need to refinance at least about US$1.7 billion-US$2 billion of debt each year, assuming the rest is serviced internally through...

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