Vedanta mobilises $1.4 bn from bonds to fund delisting of Indian subsidiary

By Sarkaritel August 21, 2020 13:33

Mumbai, Aug 21  Vedanta Resources Limited moved a step forward in its plan to delist its Indian subsidiary Vedanta Ltd by successfully mobilising $ 1.4 billion from bonds that would go into funding the buy out of equity shares held by public shareholders.

“Vedanta Resources Ltd. (VRL) hereby announces the successful pricing of senior secured bonds. The issue size was US$1.4bn, comprising 3-year amortizing bonds, with an annual coupon rate of 13% ,” the company said in a statement.

It added that the fund from the bond issuance will primarily be used to support the intended offer to buy out the equity shares of Vedanta Limited that are held by public shareholders.

The company raised the issuance size of its bond to $1.4bn from initial indication of $1.0bn in order to provide VRL with additional flexibility to also redeem a portion of its $670mm outstanding 2021 bonds.

VRL also proposes to use any balance fund left after completing delisting formalities to finance either a potential tender offer of the 2021 Bonds at par or a repayment of the 2021 Bonds at maturity.

The Bond issuance follows the commitments for $1.75bn that VRL had received earlier for a 3 month term loan facility taking the total amount of debt raise to $3.15bn across global debt markets.

With the issue, VRL has completed the planned fund-raising programme in preparation for the proposed delisting of its subsidiary, VDL. Anil Agarwal controlled VDL had taken shareholders nod for its proposed delisting.

“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 company statement said.

The entity will take necessary steps at the appropriate times to proceed with the delisting offer as required under the Delisting Regulations.

The dollar bonds have been offered and sold in a private offering to qualified institutional buyers and non-US persons outside the United States. It had taken the Approval from the Singapore Exchange Securities Trading Limited for the listing of and quotation of the bonds on the SGX-ST earlier.

By Sarkaritel August 21, 2020 13:33