New Delhi:The permanent closure of Vedanta Resources Plc’s copper operations in India is marginally credit negative as it will lower the company’s scale and business diversity, Moody’s Investors Service on Friday said. Further, it said, the cancellation of Vedanta’s land rights towards the copper expansion is a key concern in view of the company’s ability to restart copper smelting operations. “We expect the company’s scale, as measured by pro forma revenue for fiscal 2018, to decline by 25% to $11.5 billion from $15.4 billion. Vedanta’s copper operations have historically generated low profitability as compared with the company’s other business segments. The company’s copper operations in India generated single digit EBITDA margins, because the operational and financial performance of the copper smelter depends upon the availability and the price of the copper concentrate which is used to produce end products such as copper bars, rods and wires.

Source: Mint June 01, 2018 10:18 UTC