- Friday, February 28, 2025
From growing debt pile to environment-related related, the Indian conglomerate has been hit by troubles at various points.
By: Shubham Ghosh
THE withdrawal of Taiwanese electronics major Foxconn from a $19.5 billion semiconductor joint venture with Indian conglomerate Vedanta has thrown the latter its latest challenge.
Here are some are challenges that the Anil Agarwal-led company has faced in the recent times:
The London-headquartered Vedanta Resources has been hit by a growing pile of debt. While credit ratings agency Moody’s downgraded its rating on Vedanta, others expressed concern about risks of a debt default.
In March, Agarwal, the company’s chairman who had started his business as a scrap-metal dealer in Mumbai and bought his first firm — a cable manufacturer — in the 1970s, said that there have been zero defaults by the group. Vedanta’s gross debt was nearly $7 billion at the end of April, even after the company completed 75 per cent of its debt-reduction commitment.
Foxconn pulled out of the joint venture with Vedanta, less than a year after the deal was inked. One source told Reuters that concerns over incentive approval delays by the Indian government led to Foxconn taking such a step as Vedanta-Foxconn has sought incentives from the Narendra Modi government and other Indian states for the joint venture to make semiconductors.
Last month, a Reuters report said that the joint venture was proceeding slowly as the two companies had got on board STMicroelectronics for licensing technology but the Modi government wanted the European chip manufacturer play a key role, such as a stake in the partnership.
Vedanta’s copper smelter in the southern Indian state of Tamil Nadu was closed down after 13 people lost their lives in 2018 after police opened fire on environmental protesters seeking its closure. The company has now sought to sell the plant after having denied time and again allegations of the smelter being polluting.
In the eastern state of Odisha, activists and local people have obstructed Vedanta’s plans to mine bauxite in the Niyamgiri hills for years as the tribal people consider it sacred.
Vedanta has also faced problems in other countries. In Zambia, for instance, a prolonged dispute involving the company’s Konkola Copper Mines (KCM) is nearing a settlement, the country’s mines minister Paul Kabuswe said a few days ago. Vedanta’s relations with Zambia broke down many years ago and resulted in the latter appointing a liquidator for the assets of KCM in May 2019.
