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S&P: Vedanta on watch
Standard & Poor’s said it placed the BB foreign-currency long-term corporate credit rating on Vedanta Resources plc on CreditWatch with negative implications, along with the BB long-term issue ratings on its guaranteed notes and loans.
The negative watch reflects an expectation that Vedanta’s cash flows will likely be weaker in fiscal years 2016 and 2017 due to falling oil prices, S&P said.
The agency said it recently lowered its assumptions for Brent crude oil price to $70 to $75 a barrel for 2015 to 2016.
S&P said it believes the recovery of Vedanta’s weak financial ratios could be materially delayed.
The weaker performance of Vedanta’s oil business is likely to offset the benefits from an improvement in the company’s aluminum business, higher zinc volumes and prices and the company’s better conversion margins in its copper business, S&P added.
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