Mumbai: Vedanta has tied its latest overseas borrowing to a critical condition—holding on to control of Hindustan Zinc—highlighting the strategic importance of the subsidiary.
Vedanta Limited entered into a facility agreement on April 14, 2026, to raise 125 million dollars through external commercial borrowing. As detailed on page 1, the arrangement involves JPMorgan Chase Bank N.A. acting as both mandated lead arranger and lender, with Axis Trustee Services Limited serving as the agent. This financing structure provides the company with additional liquidity while leveraging its existing asset base.
A key condition of the agreement requires Vedanta to maintain at least 50.1 percent beneficial ownership in Hindustan Zinc Limited (HZL) until the loan is fully repaid. The company must also retain direct control over the subsidiary. Additionally, it is restricted from creating any security or disposing of this minimum stake, effectively locking in its controlling position as part of the financing terms.
The restrictions imposed under the facility agreement qualify as an “encumbrance” under takeover regulations. As explained in the disclosure on page 2, such covenants fall within regulatory definitions due to limitations placed on share transfer and control. The filing also notes that Vedanta already has multiple encumbrances tied to earlier financing arrangements, with this being the latest addition driven by new borrowing conditions.
Vedanta currently holds 2,565,271,353 shares in HZL, representing 60.71 percent of total share capital, as shown in the table on page 2. Of this, a significant portion is already encumbered across various facilities.
The latest arrangement involves 2,11,68,84,819 shares, equivalent to 50.10 percent of total share capital, being tied to the new covenant, reinforcing the scale of exposure linked to financing. Vedanta’s latest borrowing underscores its reliance on structured financing backed by core assets, while ensuring that continued control over Hindustan Zinc remains central to its funding strategy.
Disclaimer: This article is based solely on the contents of the company’s regulatory filing and does not include independent verification or additional sources.
