Vedanta seeks to raise $1 billion for debt repayment

VEDANTA RESOURCES is holding talks with private equity firms to raise funds for partial repayment of the company’s bonds maturing in the next two years, according to media reports.

The London-based conglomerate, led by billionaire tycoon Anil Agarwal, is in advanced discussions with Cerberus Capital, Ares SSG Capital, Bain Capital and Davidson Kempner, seeking a short-term loan of $1 billion, the Economics Times reported.

The repayment of its bonds worth $1 bn is due in January next year, followed by bonds worth another $1 bn maturing in August 2024. The company also has an obligation to repay bonds of $1.2 billion maturing in March 2025.

Vedanta is also negotiating with its bondholders for modifications of the repayment deadlines.

It has proposed to prepay 30 per cent of the bonds upfront and rolling over the rest over three years, the report said.

The company told its bondholders that it was looking to divest some of its steel and mining assets to raise funds, an effort which would take more than a year.

Its fundraising efforts come as S&P Global Ratings has warned of a possible downgrade of the company’s offshore bonds if the bondholders are not adequately compensated.

A Vedanta spokesperson told the Economic Times that the company “is in continuous discussions with its bondholders in the ordinary course including to address upcoming maturities.”

Vedanta “is in discussion with numerous parties in both the bank and fund community in addition to existing bond holders as it explores various options," the spokesperson said.

Separately, Vedanta’s subsidiary Vedanta Ltd said on Thursday (21) that its board approved a decision to raise up to $300 million through non-convertible debentures.

Vedanta Ltd shares hit their 52-week low on Thursday and closed with a 2.26 per cent decline on the BSE.