Facility Agreement Details Emerge as Vedanta-Backed Entities Take on US$ 2.25 Billion Commitment

Facility Agreement Details Emerge as Vedanta-Backed Entities Take on US$ 2.25 Billion Commitment​

A review of a recent facility agreement reveals that while Hindustan Zinc Limited (HZL) is not a direct party to the transaction, certain key related entities within the promoter group of Vedanta Limited are involved in a substantial commitment worth up to US$ 2.25 billion.

The Facility Agreement, executed on July 20, 2026, involves several parties and aims primarily at servicing the financial needs of the VRL Group. The deal includes a total maximum commitment aggregating US$ 2,250,000,000. Of this amount, the commitment from the original lenders stands at US$ 1,545,000,000, with an additional increase commitment available up to US$ 705,000,000 through potential accession agreements.

Key Parties and Deal Structure​

The agreement involves both related parties of HZL and various international lenders and arrangers.

Twin Star Holdings Ltd., a member of the promoter group of Vedanta Limited (VEDL), is listed as the Borrower in the Facility Agreement. Similarly, Vedanta Resources Limited, also a member of the VEDL promoter group, functions as the Guarantor. The agreement also includes Vedanta Holdings Mauritius II Limited and Welter Trading Limited as related parties within the promoter group.

Non-related international financial institutions participating in the deal include:

• Arrangers/Lenders: Standard Chartered Bank (Arranger and Original Lender), Barclays Bank PLC (Arranger and Original Lender), DB International (Asia) Limited (Arranger and Original Lender), First Abu Dhabi Bank PJSC (Arranger and Original Lender).
• Other Participants: Glas Agency (Hong Kong) Limited, Citigroup Global Markets Asia Limited (Arranger), J.P. Morgan Securities (Asia Pacific) Limited (Arranger), JPMorgan Chase Bank, N.A., London Branch (Original Lender), Mashreq Bank PSC, Standard Chartered Bank (Mauritius) Limited, and Sumitomo Mitsui Banking Corporation Singapore Branch (Arranger and Original Lender).

Purpose and Covenants​

The Facility Agreement was entered for multiple purposes concerning the VRL Group. These purposes include: repayment of and payment of interest on Financial Indebtedness of the VRL Group (including amounts outstanding under Refinanced Existing Loans); covering any fees, costs, and expenses incurred in connection with the transactions; and general corporate purposes for the VRL Group. A key stipulation mandates that no proceeds from this facility may be used to finance or refinance thermal coal infrastructure contrary to applicable law, or remitted to India.

While HZL itself is not a party to the agreement, its affiliated entities are subject to certain covenants designed to protect the Lenders. These restrictions apply to the Borrower and Guarantors (members of the VEDL promoter group) and include:

• Limiting security creation over HZL assets.
• Restricting the sale or transfer of HZL assets that are not in the ordinary course of business.
• Governing investments or acquisitions of material non-core assets by HZL.
• Prohibiting any Merger involving HZL (subject to carve outs).
• Imposing covenants regarding encumbrance or restrictions on distributions and the sale or disposal of shares held by group members if a subsidiary ceases to be a Material Subsidiary of VRL.

The agreement also confirms that HZL does not have any shareholding in any entity party to the Facility Agreement, and the transaction is not classified as a related party transaction under LODR for HZL.

HINDZINC Stock Price Movement​

Shares of Hindustan Zinc Limited today slipped by 0.74% after market close, settling at ₹531.15. The stock traded a volume of 2.08 million shares during the session, trading within an intraday range defined between ₹530.1 and ₹541.3.