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Vedanta delisting will not impact credit profile: Moody’s
Mumbai, July 5 (IANS) The proposed delisting of the Anil Aggarwal-led Vedanta Resources from the London Stock Exchange will have no immediate impact on its credit profile, although cash extraction risks remain from the announced complete takeover of the natural resources firm by its holding company, Volcan Investments Ltd., Moody’s Investor Service said on Thursday.
Earlier this week, Vedanta Resources and Volcan Investments, a holding company wholly owned by the Anil Agarwal discretionary trust, which owns a 66.53 per cent stake in Vedanta, announced it had reached an in-principle agreement on a possible all-cash offer for Vedanta’s remaining shareholding.
“A firm offer will require Volcan to pay an estimated $1 billion toward acquiring the balance stake of 33.47 per cent. If Volcan succeeds in increasing its stake to 90 per cent or above, it is likely that Vedanta will be delisted from the London Stock Exchange, making it a private company,” a Moody’s statement said.
“The delisting will not immediately affect Vedanta’s credit profile or rating. This is based on our expectation that Volcan will not extract incremental cash from Vedanta to provide additional liquidity for itself.
“However, if Volcan requires Vedanta to pay higher dividends to service its cash needs, it will tighten Vedanta’s cash flow, adding pressure to the Ba3 corporate family rating,” it said.
“Vedanta’s rating is based on the consolidated credit profile of Vedanta and its subsidiaries and does not take into account Volcan’s indebtedness. Any change in Vedanta’s policies, such that Vedanta is used as a financing vehicle for Volcan, will be viewed negatively and will also weigh on Vedanta’s credit profile and rating,” it added.
The American rating agency said Volcan is a private company with limited public information on its finances.
In 2017, Volcan raised an estimated $4.4 billion debt through the issue of convertible notes to buy a 19.35 per cent equity stake in Anglo American plc pledging 33 per cent of Vedanta shares as security for annual interest payments of $185 million.
Vedanta has a requirement under its bank loans to remain a listed company and will, therefore, need approval or waivers from its lenders prior to delisting.
“The reporting and disclosure requirements for private companies are less stringent than for London-listed public companies,” Moody’s said.
For instance, private unlisted companies are not required to report when any of their shareholding is pledged against any borrowings.
“However, given its substantial access to international capital markets with $5.9 billion in debt outstanding at the holding company in the form of US dollar bonds and loans, we expect Vedanta to maintain its hitherto transparent reporting on operations even after it becomes a private entity,” it said.
“When successful, the proposed offer will result in Volcan as Vedanta’s sole shareholder, but Vedanta’s corporate structure remains highly complex with less than 100 per cent ownership in its key operating assets,” it added.
–IANS
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Dr. Abhishek Verma Dedicates a Shelter in Memory of His Mother, Veena Verma, at KGMU; Inaugurated by Daughter Nicolle Verma
World-renowned business tycoon Dr. Abhishek Verma has supported Foodman Vishal Singh’s Hunger-Free World mission. In memory of his mother, Late Veena Verma, who was a 3 term Rajya Sabha MP.
Dr. Verma dedicated a state-of-the-art free permanent shelter for the attendants of patients at KGMU Medical University, Lucknow, under the aegis of Vijay Shree Foundation. His daughter, Nicolle Verma, inaugurated the shelter.
During the event, Foodman Vishal Singh honored Nicolle Verma by presenting her with a memento. Mrs. Nidhi Sharma and Avantika Yadav, associated with the organization, welcomed her with garlands. Following this, Nicolle Verma distributed essential items to the attendants and also handed out fruits. She became emotional remembering her grandmother on her birth anniversary.
On this occasion, she also inaugurated the “Veena Verma Sevalaya” in memory of her grandmother, Veena Verma, to serve the attendants. She expressed, “I feel proud that my family is engaged in nation-building as well as social service. Today, in collaboration with Vijay Shree Foundation founder Foodman Vishal Singh Ji, I feel immensely proud to dedicate this shelter for the poor, helpless, and needy attendants of patients battling serious illnesses like cancer. I am honored to be associated with the Hunger-Free World Mission for humanity.”
Inspired by the continuous humanitarian service provided by Vijay Shree Foundation over the past 17 years, Nicolle Verma donated 10 lakh rupees to support the cause. The purpose of this donation is to ensure that services continue for the needy attendants of patients suffering from severe illnesses in hospitals, as facilitated by Foodman Vishal Singh.
It is noteworthy that Dr. Abhishek Verma’s family has a legacy of public and philanthropic service. They are helping millions to carry forward the values and service work of their parents. On the occasion of his mother’s birth anniversary, Dr. Abhishek Verma dedicated this state-of-the-art permanent shelter at Lucknow Medical College to serve the attendants of patients through the Vijay Shree Foundation.
Supporting Foodman Vishal Singh’s Hunger-Free World mission, Dr. Abhishek Verma assured that he would continually support keeping this flame of humanity alive. He also promised to assist in providing medicines to the helpless patients.
Continuing her grandmother’s legacy of service, Nicolle Verma personally served food to the needy patients and attendants. She said, “It is our good fortune to have received the joy of doing this noble work today through Foodman Vishal Singh. I have taken another step forward in carrying my family’s values and cooperation by joining hands with the Vijay Shree Foundation. My father taught me to serve and help the needy, and I feel happy when I bring a smile to someone’s face.”
On the birth anniversary of the late Veena Verma, the event organizer, Vijay Shree Foundation founder Foodman Vishal Singh, said, “We feel proud and happy that Dr. Abhishek Verma, a globally renowned business tycoon, has extended his support to uplift our country from the hunger index. Today, on his mother’s birth anniversary, he inaugurated a state-of-the-art permanent shelter at Lucknow Medical College, which will always be helpful for the needy attendants of patients. It is a pleasure for me and the organization to receive the affection of Mr. Verma.”
The event was attended by General Manager Verma Family Office Hemant Garg, Sonu Rajput, and the organization’s volunteers, including Sandeep Singh, Parmeshwar Ji, Prashant Rao Gautam, Balram Singh, Ramesh Chaudhary, Suman, Jeetu, Anil, Suraj, Vinay, Manish Bhadauria, Manas Mehrotra, Vivek, Apurv, Happy, and others.
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