Vedanta arm Zinc International in talks with global banks for $1.25 billion

Zinc International loan would require guarantee from Anil Agarwal-promoted group's India-listed firm

Within days of Reliance Industries raising $5 billion from overseas, Vedanta Resources’ subsidiary Zinc International has queued up with international banks to raise $1.25 billion, banking sources said.

The group is in talks with Farallon Capital Management for the loan.

The loan would require a guarantee from Vedanta, the India listed company of the group. The Indian company’s corporate guarantee will require permission from the Indian regulatory authorities, including the Reserve Bank of India, said a source.

A mail sent to Vedanta spokesperson did not elicit any response.

In February, the Indian government had raised objections to the merger of Zinc International with Hindustan Zinc for $3 billion and Vedanta's proposal was nixed.

In March, Vedanta announced its fifth interim dividend worth Rs 37,700 crore, which will be used by Vedanta Resources to repay its debt.

Vedanta Resources, the ultimate holding company of Anil Agarwal-promoted group, holds stakes in metals and mining projects across the world. Its main business is in India with Vedanta as the holding company of India assets.

The Indian natural resources group has debt-servicing obligations of about $3 billion, including interest and inter-company loans. It will have at least another $1 billion obligations that require funding until March 2024. Of this, the first payment of $750 million is due this month end.

 In a statement on April 3, rating firm S&P said Vedanta Resources would likely have enough liquidity until December, securing about $1 billion funding at one of its operating companies.