Vedanta Aluminium Metal Limited Subjected to Covenants in US$ 2.25 Billion Facility Agreement

Vedanta Aluminium Metal Limited Subjected to Covenants in US$ 2.25 Billion Facility Agreement​

Vedanta Aluminium Metal Limited (VAML) faces operational covenants detailed within a large-scale Facility Agreement, even though VAML itself is not a direct party to the financial arrangement dated July 20, 2026. The facility agreement involves several members of the promoter group and concerns substantial commitments totaling US$ 2.25 billion.

The agreement, which includes key entities as guarantors and related parties, was entered into for multiple purposes pertaining to the VRL Group. These purposes include the repayment of Financial Indebtedness, the payment of interest and associated amounts on Refinanced Existing Loans, and general corporate purposes for the VRL Group. A specific restriction noted in the facility agreement dictates that none of the proceeds generated may be utilized to finance or refinance thermal coal infrastructure if it violates applicable terms.

The commitment structure details a total maximum commitment aggregating US$ 2,250,000,000. As of the date of disclosure, the original lenders' commitment stands at US$ 1,545,000,000, with an additional commitment capacity of up to US$ 705,000,000 available through increase financing.

Related Parties and Group Involvement​

While VAML is not a signatory to the Facility Agreement, certain aspects of the agreement directly affect VAML due to its position as a member of the Group. The parties involved in the capacity of Guarantor or Promoter Group members include Twin Star Holdings Ltd., Vedanta Resources Limited (VRL), and Vedanta Holdings Mauritius II Limited.

The financial influence exerted by these related entities on VAML, based on their shareholding within the group structure, is detailed below:


The arrangement includes a significant list of banks and financial institutions serving as Arrangers/Lenders, including Citibank N.A., Standard Chartered Bank, Barclays Bank PLC, and DB International (Asia) Limited among others.

Operational Restrictions Imposed on VAML​

No direct liabilities were imposed on Vedanta Aluminium Metal Limited under the Facility Agreement; however, certain covenants have been established that restrict future activities of VAML, which are categorized as 'identified clauses' effective only from the first Utilisation Date and other restrictions active from the date of the agreement.

The key operational restrictions affecting VAML include:

• Asset Security: Prohibition (subject to carve-outs) on creating any security over VAML’s assets or shares in VAML, or securing indebtedness of the promoter.
• Asset Disposal: Restriction on the sale, transfer, and disposal of VAML's assets that are not part of the ordinary course of business.
• Investment Limits: Restriction on investment or acquisition of material assets or businesses by VAML, provided those assets or businesses are not associated with mining, metals, coal, oil and gas exploration/production, infrastructure, power, or energy industries.
• Distribution Limitations: Covenants regarding distributions in accordance with the Facility Agreement terms.

The facility agreement was structured to ensure protection for the Lenders through standard representations, warranties, and covenants that the Obligors agreed to provide. The transaction is not classified as a related party transaction under LODR for VAML.

VAML Stock Price Movement​

Vedanta Aluminium Metal Limited shares gained today, closing at ₹436.85 after rising 1.11% or ₹4.80 from the previous close. The stock saw brisk activity in post-market trading, with over 14.59 million shares traded during the session.