Facility Agreement Commitment Reaches US$ 1 Billion Involving Hindustan Zinc Limited Group

Facility Agreement Commitment Reaches US$ 1 Billion Involving Hindustan Zinc Limited Group​

A large-scale facility agreement totaling US$ 1,000,000,000 has been executed involving various entities within the Vedanta promoter group and concerns Hindustan Zinc Limited (HZL). The agreement, signed on July 15, 2026, details financial obligations related to the VRL Group.

The facility is structured with several parties acting as borrowers, guarantors, agents, and lenders. While HZL itself was not a direct signatory to the Facility Agreement, specific covenants within the document are relevant to HZL as a member of the promoter group of Vedanta Limited (VEDL).

Key entities involved in the agreement include Twin Star Holdings Ltd., Vedanta Resources Limited, Vedanta Holdings Mauritius II Limited, and Welter Trading Limited acting as borrowers.

Purpose and Operational Scope​

The Facility Agreement was entered into for multiple corporate purposes related to the VRL Group. The stated objectives include repaying financial indebtedness of the VRL Group, payment of associated fees and costs, and fulfilling general corporate needs of the VRL Group. A specific stipulation noted in the agreement requires that no proceeds from this facility be used to finance or refinance thermal coal infrastructure if such usage would violate applicable law, including Anti-Bribery and Corruption Laws or Sanctions.

Restrictions on Hindustan Zinc Limited​

The agreement imposes certain restrictions on HZL through covenants agreed upon by the promoter group members. These are categorized based on their effective date.

While no direct liabilities were imposed on HZL under the facility terms, the quantification of these restrictions is related to maintaining compliance with the Facility Agreement as a member of the promoter group of Vedanta Limited (VEDL).

Restrictions that become applicable from the first Utilisation Date include:

• Limits on the creation of security over HZL assets or securing indebtedness of the promoter.
• Restrictions on the sale, transfer, and disposal of HZL assets unless they are in the ordinary course of business.
• Constraints on investment in or acquisition of material assets by HZL in sectors not associated with mining, metals, coal, oil and gas exploration/production, infrastructure, power or energy industries.
• Any Merger involving HZL.
• Restrictions on encumbrance or restriction on distributions.
• Rules regarding the sale or disposal of shares of HZL held by any member of the Group if that action would cause HZL to cease being a Material Subsidiary of VRL.

Additionally, restrictions effective from the date of the Facility Agreement include limitations preventing HZL from entering into any material contract or arrangement with another party that is outside the ordinary course of business and not conducted on arm's length terms.

HINDZINC Stock Price Movement​

Hindustan Zinc Limited shares on Friday slipped by 0.57% to settle at ₹518.35, shedding ₹2.95 from the previous close. The stock saw a total traded volume of 2.36 million shares during the session.