Vedanta might sell copper plant in Tamil Nadu for Rs 4,500 cr, bankers reach out to bidders: Report

Mining major Vedanta Ltd, controlled by billionaire Anil Agarwal, is trying to sell the copper plant in Tamil Nadu for Rs 4,500 crore. Last year, the company had invited expressions of interest (EoIs) for the unit. But it failed to get any favourable response as the plant was closed for the last five years.  

The process has now started again as bankers are reaching out to potential bidders, a report in Business Standard said. 

The plant was shut down on the orders of the Tamil Nadu Pollution Control Board (TNPCB). Following which, Vedanta moved the apex court against the closure decision and the final verdict is likely by August. 

The company invited EoI on June 12 to restart activities following the Supreme Court's direction. 

The report further said that Vedanta Resources (VRL), the parent company of Vedanta Limited, is trying to raise funds to repay its debt. The amount raised by selling the unit would help in meeting its capital expenditure of $1.7 billion for this year. 

Vedanta Resources still has to repay debt of $2.2 billion in the current financial year. It has been reported that the company is trying to rely on different ways of brand monetisation, refinancing and transfer of general reserves to retained earnings to meet its repayment timelines. 

The company had a total debt repayment of $4.2 billion in FY24. Of this, the company has already paid $2 billion in Q1 FY24.  

It has to pay back the remaining $2.2 billion, which includes total principal requirements of $1.3 billion and interest or inter-company loans. A big chunk of this $1.3 billion is a $1-billion bond due in January 2024. 

In a bid to meet the repayment target, the percentage of royalty from Indian listed entity Vedanta Limited has increased from 2 per cent to 3 per cent from this year. 

Earlier in June, Vedanta Resources had informed investors that it has entered into a similar royalty agreement with Hindustan Zinc and fixed the royalty percentage at 1.7 per cent.  

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