Vedanta Resources Bonds Rise After Open Offer for India Unit
(Bloomberg) -- Vedanta Resources Ltd.’s bonds rose after the miner launched an offer for its India unit, its latest attempt to simplify a corporate structure that hinders the parent from easily accessing cash at subsidiaries.
Following the open offer announced late Saturday, the London-based holding vehicle also announced a consent solicitation exercise for its dollar bonds on Monday, seeking changes to the terms of its covenants to allow the firm to add debt in order to buy shares in Vedanta Ltd.
The London-based company’s 2022 dollar note gained 2 cents on the dollar to about 92.6 cents in late evening Asia trading, the highest since March, Bloomberg-compiled prices show. Vedanta Resources and its three units plan to buy as many as 371.75 million shares of Mumbai-based Vedanta at 160 rupees each in a 59.48 billion rupee ($812 million) deal, according to an exchange filing Saturday.
If the entire offer is taken up by shareholders, Vedanta Group could increase its stake in the Indian unit by 10 percentage points to 65.11%. Shares in Vedanta Ltd. fell 1.6% to 179.15 rupees.
The latest offer shows the group’s continued keenness in streamlining its corporate structure. Increasing its holding in Vedanta Ltd. would allow Anil Agarwal’s debt-heavy holding company to access a larger piece of the dividends that the money-spinning business pays.
Vedanta Resources’ offer comes a month after it allayed investor concerns over its funding by raising $1 billion from a note sale, albeit at one of the highest yields for a dollar bond in Asia last year. Investors will closely watch the response to the open offer after shareholders thwarted the group’s attempt at delisting Vedanta last year.
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