More cash to Volcan to hurt Vedanta's credit profile, says Moody's

The upstreaming of cash to Volcan through the structured product is an important precedent because it was not aligned with creditor interests

Moody’s Investors Services has flagged that any direct or indirect upstreaming of cash to Anil Agarwal’s Volcan would hurt Vedanta’s credit profile.
 
The rating agency has said that the $561-million structured product investment is a clear indication of Vedanta’s willingness to deploy its cash to support Volcan’s interests. “This willingness to deploy funds and Volcan’s probable cash-flow shortfall by March 2020 support our expectation that Volcan will likely tap into Vedanta’s liquidity. Volcan has a $900-million loan repayable over the next three years. If this repayment responsibility falls to Vedanta, we expect its liquidity to weaken,” it said on