Vedanta looks to increase its inter-corporate loan limit to Rs80,000 crore

Mumbai: Vedanta Ltd is looking to increase its inter-corporate loans limit to ₹ 80,000 crore from the present ₹ 60,000 crore, the company said on Friday.

In a postal ballot notice sent to exchanges on Friday, the company said it was seeking shareholders’ approval for an “increase in limits for Inter-Corporate Loans, Investments and Guarantees and Security in connection with loan(s) from ₹ 60,000 crore to ₹ 80,000 crore.”

The resolution, if approved, will allow Vedanta to lend, make a guarantee against loans, provide security and make investments in its group companies, both in India and overseas to the limit of ₹ 80,000 crore. It will also allow Vedanta to borrow from its subsidiaries.

The proposal comes a day after Vedanta’s unit Cairn India Ltd extended the maturity period of a $1.25 billion loan it gave to Vedanta subsidiary THL Zinc Ltd (TZL) by two years. The loan was due in July 2016.

TZL is the holding company of the Vedanta Group’s international zinc business, with assets in South Africa and Namibia.

Vedanta had cash and liquid investments worth ₹ 52,666 crore on its books as of 31 March 2016. It had a consolidated debt of ₹ 77,952 crore.

On Friday, Vedanta shares closed at ₹ 98 apiece, 4.62% lower from its previous close of ₹ 102.75, while the benchmark Sensex closed 1.17% lower at 25,489.57 points.