Vedanta Ltd has tied up a facility of Rs 8,000 crore (replacement facility) with Union Bank of India at 7.75% to take over a majority of the syndicated facility after multiple discussions with potential lenders.
- This replacement facility was availed on December 28, 2021 to take over the existing Syndicated facility to reduce the overall interest cost of the company and to prepay high-cost debt raised at over 10% two years ago.
- Vedanta has pledged 14.8% shares of Hindustan Zinc with Union Bank as security among other things.
What is a syndicated facility?
A loan or other credit facility provided by more than one lender to a borrower (or associated borrowers) under the common terms and conditions
Vedanta Profile of Syndicated facilities:
i.During 2020, amid the COVID-19 pandemic, Vedanta Ltd had tied up a syndicated facility of Rs 10,000 crore with State Bank of India (SBI) as the lead bank at a running cost of 10.5%.
ii.It prepaid Rs 10,000-crore term loans availed from four local banks at over 10% in December. Of the Rs 10,000 crore prepaid, Rs 8,000 crore was raised from Union Bank, Rs 500 crore each was raised from IDBI Bank and Canara Bank as non-convertible debentures in the last week of December, and Rs 1,000 crore was from internal accruals.
Recent Related News:
Union Bank of India has entered into a Memorandum of Understanding (MOU) with the National Small Industries Corporation Ltd (NSIC) under ‘NSIC Bank Credit Facilitation Scheme’ to support Micro, Small and Medium Enterprises (MSMEs) with credit requirements.
About Vedanta Limited:
It is an Indian multinational mining company.
Chief Executive Officer– Sunil Duggal
Headquarter- Mumbai, Maharashtra