Vedanta Resources announces bond issuance of $1.4 billion

Vedanta Resources announces bond issuance of $1.4 billion

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Kolkata: Vedanta Resources Limited has announced the pricing of senior secured bonds. The issue size was $1.4 billion, comprising 3-year amortizing bonds, with an annual coupon rate of 13%. Funds from the bond issuance will primarily be used to support the intended ofoffer to buyout the equity shares of Vedanta Limited that are held by public shareholders, an official statement said.

The issuance size was increased to US$1.4 billion from initial indication of US$1 billion in order to provide VRL with additional flexibility to also redeem a portion of its US$ 670 mn outstanding 2021 bonds. Upon completion of all payment obligations as required under the 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.

The bond issuance follows the commitments for US$1.75bn that VRL had received earlier for a 3 month term loan facility taking the total amount of debt raise to US$3.15bn across global debt markets. “This completes VRL’s planned fund-raising 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 added.

The proceeds of the bonds will be deposited into an offshore escrow account pending a successful conclusion of the bidding process under the Delisting Regulations resulting in delisting of VDL’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 bank debt package will also be unwound in the event of an unsuccessful delisting. The proposed financing package will support a fair offer to shareholders while balancing the needs of VRL’s debt providers and other stakeholders, the company said.

VRL said it will at the appropriate times take the necessary steps to proceed with the delisting offer as required under the Delisting Regulations.





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