Vedanta Resources gets more leeway with debt covenant change

 
Jessica Morris
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A general view of the Vedanta aluminum r
Vedanta churned out record annual production of aluminium (Source: Getty)

Shares in Vedanta Resources rose today, after the miner secured changes to its debt covenants which will give it more financial leeway amid the commodity price rout.

The India-focused miner said certain changes agreed with creditors at its request came into effect on 31 March, the end of its financial year, and will stand until 30 September, 2018.

"This will ensure compliance by the company with its covenants relating to all facilities for the testing period ending 31 March 2016," it said.

It shares rose as much as 3.4 per cent to 363.5p in early afternoon trading, before settling around 359.8p.

Vedanta also warned it could have to write-down the value of some of its assets this year due to the low commodity prices.

It's reviewing the carrying value of its assets and long term price assumptions in light of the price rout. Any changes will be a non-cash charge and would be reflected in its preliminary results for 2016.

Vedanta churned out record annual production of aluminium, electricity, silver and copper cathodes between January and March.

Commodity companies have been ramping up production to combat low prices, allowing them to defend and even expand their market share.

Tom Albanese, chief executive of Vedanta, said: "We are continuing to optimise production across our portfolio to generate maximum value in a low commodity price environment and remaining focussed on reducing costs to protect margins."

"These strong operational results reinforce the quality of our assets, our operational capability and resilience to weak markets. We also remain committed to proactively manage our balance sheet in these weak markets."

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