On 31st August 2020, Vedanta announced its tie up for a long term syndicated loan facility for Rs.10000 crore with State bank of India(SBI) as facility agent and SBICAP Trustee Company limited(SBICTCL), a wholly owned subsidiary of SBI Capital Market Limited(SBICAP) as the security trustee with door to door tenor of 7 years.
Note:
i.Syndicated loan is a loan offered by a group of lenders to provide credit to a large borrower.
ii.As a lender State Bank of India(SBI) has committed Rs.5000 crore.
Key Points:
i.The facility end use stipulates refinancing of near term debt maturities of Vedanta and for the capital expenditure of the metals and mining giant.
ii.This loan increases the average debt maturity profile of Vedanta Limited and also improves the liquidity ratios as the near term maturities are replaced by a long term loan.
iii.The way of pledge over the shares held by the Vedanta in Hindustan Zinc Limited(HZL), a subsidiary of Vedanta, which represents 14.82% of the paid up share capital of HZL which provides security will be released in a phased manner as per the terms of facility.
iv.A non-disposal undertaking has been given with respect to its shareholding in HZL to the extent of 50.1% of the paid up share capital of HZL which are not pledged.
Recent Related News:
i.Government of India (GoI) has approved a scheme for improving the short-term liquidity position of non-banking finance companies (NBFCs)/housing finance companies (HFCs) through a Special Purpose Vehicle (SPV) in the form of Special Liquidity Scheme (SLS) Trust set up by SBI Capital Markets Limited (SBICAP), a subsidiary of the State Bank of India (SBI).
ii.The executive committee of the central board of State Bank of India (SBI) has approved an investment of Rs 7,250 crore in Yes Bank Ltd. as a part of RBI formulated rescue plan titled “Yes Bank Ltd. Reconstruction Scheme, 2020” for the revival of Yes Bank.
About Vedanta Limited:
Chief Executive Officer(CEO)– Sunil Duggal
Headquarters– Mumbai, Maharashtra
About State Bank of India(SBI):
Chairman– Rajnish Kumar.
Headquarters– Mumbai, Maharashtra.
Tagline– The banker to every Indian; With you all the way; Purely banking nothing else; The nation banks on us.
