Facility Agreement Signed: Vedanta Aluminium Metal Limited Affected by US$ 1 Billion Debt Transaction

Facility Agreement Signed: Vedanta Aluminium Metal Limited Affected by US$ 1 Billion Debt Transaction​

Vedanta Aluminium Metal Limited (VAML) is impacted by a newly executed bridge facility agreement totaling US$ 1,000,000,000. The transaction involves several promoter group entities and lenders. While VAML was not a direct party to the agreement dated July 15, 2026, certain covenants within the Facility Agreement are effective for VAML as a member of the Group.

The facility agreement was entered into by the Borrower, Twin Star Holdings Ltd., with Guarantor Vedanta Resources Limited. The agreement involves multiple parties, including promoter group entities and various financial institutions acting as lenders and arrangers.

Key Parties in the Facility Agreement​

The following table outlines the involvement of key companies in the transaction:

Purpose and Terms of the Agreement​

The Facility Agreement was executed on July 15, 2026, and covers a total commitment aggregating US$ 1,000,000,000.

The agreement was entered for several purposes pertaining to the Vedanta Resources Limited (VRL) Group. These include repayment of Financial Indebtedness of the VRL Group, payment of any fees and costs incurred in connection with the transaction, and general corporate purposes for the VRL Group. It is noted that no proceeds from this facility may be used to finance or refinance thermal coal infrastructure or be remitted outside of India.

While Vedanta Aluminium Metal Limited holds no shareholding in any of the entities party to the agreement, it faces restrictions imposed by the Borrower and Guarantors as members of the promoter group.

Restrictions Imposed on VAML​

No direct liabilities were imposed upon VAML under the Facility Agreement; instead, limitations are set through covenants. These restrictions are categorized based on their effective dates:

Restrictions Effective from the First Utilisation Date:
The obligations restrict certain actions by VAML that could impact the Group's financial stability. These include:

• Creating security over assets of VAML or securing indebtedness of the promoter (subject to carve-outs).
• Sale, transfer, and disposal of non-ordinary course assets (subject to carve-outs).
• Investment in or acquisition of material assets by VAML in industries outside of mining, metals, coal, oil, and gas exploration/production.
• Any Merger of VAML (subject to carve-outs).
• Encumbrance or restriction on distributions (subject to provisions of the Facility Agreement).

Other Restrictions Effective from the Date of the Facility Agreement:
A key covenant mandates that VAML cannot enter into any material contract or arrangement with or for the benefit of any other person, except in the ordinary course of business and on arm's length terms.

The transaction does not classify as a related party transaction under applicable regulations, and VAML has no shareholding interest in the primary parties to the agreement.

VAML Stock Price Movement​

Shares of Vedanta Aluminium Metal Limited slipped on Friday, settling at ₹442 after falling 3.02% from the previous close of ₹455.95. The stock traded within a wide intraday range of ₹440.35 to ₹457.60 and recorded a volume of 7.5 million shares.