Vedanta’s Debt/Ebitda Covenant at Risk, May Be Waived: Lucror

2015-01-20 03:20:07.730 GMT

By Neha D’silva and Tanya Angerer

(Bloomberg) -- Vedanta’s net debt/Ebitda covenant may be triggered in next reporting period if operating environment deteriorates further, Trung Nguyen, credit analyst at Lucror analytics said in a note.

• “Any covenant breach will likely be waived,” Nguyen says

• Vedanta’s H2 (Oct-March) Ebitda will be $1.3b to $1.5b, slightly higher than the minimum $1.2b trigger test: Lucror

• Vedanta’s 6% 2019 bonds were at 82.59 at 11:17am Hong Kong time, up from 80.35 on Jan. 16. It fell 10.40 points last wk, its biggest weekly drop

• NOTE: India govt. opposed the merger of Vedanta’s iron-ore unit Sesa Goa and copper producer Sterlite Industries yday. Final hearing for the case will be April. 28: Lucror

• News is credit negative because undoing the merger would be costly, could increase co.’s tax liability, organization complexity, and make it more difficult to upstream cash to holding co.: Nguyen

• Roma Balwani, Mumbai-based president of group communications for the co. was unable to comment when called outside of business hours

• NOTE: Moody’s puts Vedanta on negative outlook

• NOTE: Vedanta says hasn’t breached covenants, bonds recover