Vedanta facing hurdles to finance Cairn deal: Report

Citing Thomson Reuters’ International Financing Review,Herald Scotland said that several banks have “shunned the deal on environmental grounds.”

“Vedanta Resources is at risk of hitting the buffers after a refusal by certain banks to back the deal on environmental grounds.

“London-listed Vedanta Resources,controlled by Indian- born Anil Agarwal,is said to be struggling to put together a consortium of banks willing to underwrite the USD 6.5 billion it needs to borrow in order complete the acquisition,” the report said.

It said,”Although Royal Bank of Scotland,Standard Chartered and Barclays are all reportedly on board,several lenders have shunned the deal on environmental grounds.”

The group has faced a few setbacks on the environmental front related to its core aluminium and copper businesses in the last two months and has faced severe criticism from international NGOs such as Amnesty International and Survival International.

Vedanta had on August 16 announced intention to buy up to 60 per cent stake in Cairn India,but the progress on the deal has been slow due to regulatory hurdles and partner ONGC’s insistence on its nod for the transaction.

Vedanta also appointed Antony Henshaw as its Chief Sustainability Officer to execute the social initiatives of the group.

In August,the Union Environment Ministry barred its USD 1.7 billion bauxite mining project at Niyamgiri in Orissa,citiing violations of green and triabl norms. However,the group denied any such violations but later maintained it would look into the issue.

Later,the Ministry halted expansion programme of its aluminium refinery being undertaken in the state.

Last month,Sterlite Industries,the flagship company of Vedanta Resources,was recently asked to halt work on its copper unit at Tuticorin in Tamil Nadu by the Madras High Court on grounds of violation of environment norms. However,the Supreme Court last month stayed the HC order on closure of copper smelting plant.

The group has always maintained that it has a robust sustainable development framework,”encompassing the four elements of Health & Safety,Environmental Stewardship,Nurturing People,and Empowering Communities.”