S&P warns of possible credit rating downgrade for Vedanta Resources over debt policy shifts

economictimes.indiatimes.com:

Vedanta Resources financial policy regarding debt transactions may result in a potential downgrade of its current 'B-' rating to 'CCC' or 'CC,' as detailed in their credit FAQ addressing the implications of a liability management exercise for Vedanta Resources' credit rating.
This rating action will happen if Vedanta tries a debt deal without enough compensation or buys back debt at a lower price than its face value in secondary markets. If Vedanta goes through with such a deal, S&P would probably lower Vedanta's rating to 'SD' and the bond ratings affected by this would drop to ‘D'.

Empower Your Corporate Journey with Strategic Skill Courses

The clarification has come following a bondholder identification exercise announced by the company on August 24, 2023. Vedanta management has met investors in Singapore and Hong Kong this week and have discussed a potential extension of upcoming bonds through partial bond exchange and partial upfront payment, as reported by ET on September 12.
S&P said that according to their regular interactions with Vedanta, the company is exploring ways to meet its obligations and avoid defaults.

S&P maintains a 'B-' rating but with a negative outlook on Vedanta with the expectation that the company will secure additional funds to meet upcoming debt maturities. They estimate a current shortfall of about $600 million until January 2024, with a potential further deficit of $1 billion-$1.5 billion by August 2024. However, the negative outlook implies a significant chance