Vedanta Ltd (VIL) had agreed to provide loans and guarantees worth Rs 7900 crore to its parent Vedanta Resources (VRL) just months before the launch of a delisting offer for the Indian subsidiary by the London-based VRL. About Rs 2,311 crore of this loan had already been given before the launch of the offer, latest filings by VIL show.
VIL has not revealed any granular details of the use of funds or which of its offshore subidiaries will be lending, the nature of the loan instruments, their tenure or even the interest cost for these loans. The loans, revealed for the first time in VIL’s June quarter results released on October 3, is set to keep the spotlight on VRL’s corporate governance practices especially the use of inter-corporate loans from listed subsidiaries by the parent.
VIL has 49 subsidiaries of which around 40 are offshore. They include Cairn India Holding Ltd, that owns the economic interest in the Barmer oil block in Rajasthan, Skorpion Zinc Ltd, Furjairah Gold and Black Mountain Ltd.