Moody's upgrades outlook on Vedanta to stable

Tags: News
Ratings agency Moody's has upgraded its outlook on Vedanta Resources to 'stable', from 'negative' earlier, contending that the worst is over for the company.

"With some of Vedanta's idled iron ore, copper and aluminium assets now operating, we believe that the worst is past for Vedanta even as commodity prices remain broadly flat," said Alan Greene, Moody's Vice President - Senior Credit Officer.

Moody's said Vedanta's rating outlook has been carrying a 'negative bias' since August 2010.

The rating outlook was also under review for potential downgrade as the company embarked on debt-funded buy of Cairn India and when Vedanta was slow to pre-arrange funds for the repayment of a convertible bond in April last year.

Notwithstanding these events, the underlying operations have continued to make progress and the presence of Cairn India is a major factor in stabilising the overall business, Moody's said.

"While we expect Vedanta's performance and credit metrics for the year just completed to be softer than for FY'13, we nevertheless take the view that a downgrade from the current Ba1 level is increasingly unlikely and have therefore stabilised the rating," he said.

Apart from taking steps to reinforce its credit profile, Vedanta has also simplified its group structure through the formation of Sesa Sterlite Limited in August 2013 and improved its liquidity profile.

EDITORIAL OF THE DAY

  • Right to reveal

    Delhi is India’s first state to announce a scheme for witness protection. But what about the witnesses in other states?

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

Urs Schoettli

New masters of the Financial Times

A few days ago, Japan’s leading financial daily Nihon Keizai ...

Anuja Sharma

Focus mindfully to get the result

Have you ever tried to light a fire using the ...

Gautam Gupta

Our fashion schools need to notch it up

“Creativity is the key to success and primary education is ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture