Billionaire Anil Agarwal’s Vedanta Group is looking to free up cash and raise funds, possibly via a loan, as its $500 million junk-rated bond matures at the end of this month, according to Bloomberg.

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The board of Vedanta Ltd. will consider paying out a first dividend for the current business year at an upcoming meeting, according to a statement. The Indian mining conglomerate is also in talks with banks to raise at least $500 million, according to people familiar with the matter.

Agarwal’s Vedanta Resources Ltd. is relying heavily on money from its units to reduce its debt load after it failed to generate $3 billion via the sale of a zinc mining unit to Hindustan Zinc Ltd. Mumbai-based Vedanta Ltd. paid out about $4.6 billion in five dividends to its London-based parent last financial year. Yet weaker metals prices and high costs crimped its most recent quarterly profit, potentially limiting the scope for more dividends.

The $500 million May 31 bond pulled off the previous day’s more-than-three-week low and was trading up 0.3 cents at 96.99 cents per dollar at 1:01pm in Hong Kong.

Proceeds from the loan, with a maturity of as much as 5 years, would be used to for a bond repayment, said the people, who declined to be identified because the matter is private. Adding lenders may take deal size to $900 million, the sources said. The loan will be guaranteed by Vedanta Ltd.

When asked about the fundraising, a spokesman for Vedanta said that as a growing company, it routinely met investors, bankers and financiers. “This is only natural,” he said. “As a transparent company we have always disclosed funding once it is finalized. We will continue to do that.” The Vedanta Ltd. board is scheduled to meet and approve the dividend on May 22, according to a stock exchange filing.

The stock opened higher on the exchanges on Thursday morning, but gave up its gains as the day progressed and is trading flat at 12:30 pm.

(Edited by : Vahishta Unwalla)