Fitch: Vedanta outlook positive

Fitch Ratings said it revised Vedanta Resources plc's outlook to positive from stable and affirmed its long-term foreign-currency issuer default rating at BB+.

The agency also affirmed Vedanta's senior unsecured debt rating at BB.

The outlook revision reflects expectation that Vedanta will be able to deleverage beginning fiscal 2013 from its fiscal 2012 level, when adjusted net debt to EBITDAR was already below 2x on a pro-forma basis, according to the agency.

Vedanta's issuer default rating reflects the diversification of its EBITDA and cash flow profile across various metal and energy businesses, the agency said.

The rating also reflects Vedanta's strong cost and market positions, the agency noted.

This is partly counteracted by the company's relatively higher cost structure in the aluminium business due to lack of backward linkages in bauxite mining, Fitch said.

The ratings also factor in the regulatory issues impacting India's mining industry and Vedanta's various businesses, the agency said.

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