Vedanta Resources Raises $1.4 Billion Via Bonds To Support Delisting Of India Unit
A logo is displayed on the Indian headquarters of Vedanta Resources Plc, which houses the company’s Sterlite Industries (India) Ltd. unit, in Mumbai, India. (Photographer: Adeel Halim/Bloomberg News)

Vedanta Resources Raises $1.4 Billion Via Bonds To Support Delisting Of India Unit


London-based Vedanta Resources Ltd. has raised $1.4 billion via bonds to support the delisting of its India unit.

The bond issuance follows the commitment for $1.75 billion that Vedanta Resources had received for a three-month term loan facility. The total debt raised now stands at $3.15 billion. Vedanta Ltd. has already received shareholders' nod for delisting.

"Vedanta Resources hereby announces the successful pricing of senior secured bonds. The issue size was $1.4 billion, comprising three-year amortising bonds, with an annual coupon rate of 13%,” the billionaire Anil Agarwal-led firm said in a statement on Friday. The funds raised would be primarily used to buy out equity shares of Vedanta Ltd. from public shareholders.

Vedanta Resources initially intended to raise $1 billion via bonds but inflated the issue to gain flexibility in redeeming a portion of its $670 million bonds due 2021.

"Upon completion of all payment obligations as required under delisting regulations, any balance funds available shall be used to fund either (a) a potential tender offer of the 2021 bonds at par or (b) a repayment of the 2021 bonds at maturity.

"This completes VRL's planned fundraising programme in preparation for the proposed delisting of its subsidiary VDL, as we believe this is the maximum incremental leverage we can consider in our capital structure,” the statement read.

The proceeds of the bonds will be deposited into an offshore escrow account pending a successful conclusion of the bidding process under delisting regulations, resulting in delisting of Vedanta's shares and will be used to redeem the bonds in the event that the delisting is unsuccessful by a certain long-stop date, the company said.

The bank debt package will also be unwound in the event of an unsuccessful delisting.

On Thursday, Vedanta shares fell 0.04% to Rs 128.95 apiece on the BSE while the benchmark Sensex ended the day 1.02% lower at 38,220.39 points.

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