S&P Ratings Services has affirmed a non-investment grade 'BB' long-term foreign currency corporate credit ratings on Vedanta Resources Plc, while the outlook has been revised to positive from negative.
The outlook revision reflects greater clarity on some company developments, especially the uncertainty on operating the alumina refinery in Orissa, a S&P statement said.
Furthermore, its power-generation project is expected to be funded and constructed as scheduled, though its cash flow contributions have not been factored into the current ratings, it said.
"These events, in the backdrop of steady improvement in the credit metrics and greater clarity on future capital commitments, support the positive outlook on the ratings," said S&P credit analyst Anshukant Taneja.
Meanwhile, the outlook factors in Vedanta's bid to acquire Asarco LLC through a fully debt-funded approach for the $2.6 billion outlay, may exhaust the company's enhanced debt-capacity and affect the momentum for further improvements, the statement said.
Asarco is a copper mining, smelting and refining company.
"These events, in the backdrop of steady improvement in the credit metrics and greater clarity on future capital commitments, support the positive outlook on the ratings," S&P Credit Analyst Anshukant Taneja said.
