Vedanta reportedly seeking $1 billion loan via Mauritius-based subsidiary

Several big names such As Anil Ambani and the man behind Big Bazaar and Pantaloons Kishore Biyani have lost fortunes after falling in a debt trap. Indian firms borrowing too much for their capacity to repay remains a concern after the Adani Group was called overleveraged and has been prepaying loans to win back investor confidence.

Another firm which recently reassured investors about going debt-free in the medium-term, Vedanta is reportedly eyeing another $1 billion loan.

More debts to clear all debts?

• Reports of the mining conglomerate seeking a nod from the Securities and Exchange Board of India (SEBI) to borrow more, come after it dismissed the possibility of selling a 5 per cent stake.

• The $1 billion loan to be raised through a Mauritius-based subsidiary THL Zinc Ventures, will be upstreamed to holding firm Vedanta resources in London.

• Vedanta has repaid a $250 million debt slated for maturity in March, and seeks $1 billion from JP Morgan, Barclays, Standard Chartered and Deutsche Bank for payments due in May.

High debt and the Mauritius connection

• Vedanta currently has a debt of almost $12 billion, but has reassured investors since its still below $13 billion.

• Funds flowing through Mauritius-based firms, after Adani's offshore companies in the nation, were named as key facilitators for alleged fraud according to the Hindenburg report.

• The firm, which signed an MoU to set up a microchip plant in Gujarat with Foxconn, was also said to be struggling to raise funds for the same.

• But it denied the reports and claimed that negotiations are underway with investors who are on board.