Vedanta shares rise 6% on releasing encumbered shares after redeeming $1.2 billion bonds

Vedanta's stock price saw a rise of nearly 6% on December 6, after promoter Vedanta Resources informed about the released of company's encumbered shares held by group subsidiaries entities Twin Star, Welter Trading, Vedanta Mauritius I & II and Vedanta Netherlands.

Vedanta Resources' subsidiary Vedanta Resources Finance II Plc had issued $1.2 billion, 13.875% Senior Bond due in 2025, guaranteed by promoter group entities. This was done to lower the company's interest cost.

"...the Issuer has, as on 04 December 2024 redeemed the entire outstanding amount of the Bonds and all Encumbrances created pursuant to the Bonds and the Trust Deed have been released," said Vedanta. No pledge had been created by any of the Promoter Group Entities on shares of Vedanta Limited in relation to the Bonds, the company added.

The release of encumbered shares has led to a significant deleveraging at the group level, bringing it to the lowest level in a decade. "...with the $1.2 billion VRL bond issuance and ongoing deleveraging, we have reduced Holdco debt to $4.8 billion, the lowest level in a decade. This positions us well to generate lasting value for our stakeholders, both now and in the years to come," Ajay Goel, CFO, Vedanta had said recently.