Moody's keeps Vedanta on downgrade review

Moody's Investors Service said it continued to maintain on review for possible downgrade the Ba1 corporate family rating and Ba2 senior unsecured rating of Vedanta Resources plc.

The review began in August 2010 after Vedanta announced the proposed acquisition of a controlling stake in Cairn India Ltd. for $9.6 billion or less, Moody's said.

Recently the seller, Cairn Energy plc and Vedanta agreed to extend the completion date deadline about a month to May 2011, the agency said.

This was as a result of further delays in the regulatory approval process. The government of India's final decision is still awaited and the outcome is in the hands of a special ministerial panel, Moody's said.

The $6 billion of debt financing, which is guaranteed by Vedanta Resources plc, is in place, the agency said.

But Moody's said it would not be surprised if the acquisition failed to occur.

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