Article
Vedanta Resources in Talks With Banks for ~$500M Club Loan, Considering ~$300M Tap to $900M 10.875% Bonds Due 2029 for Partial Refinance of Due 2028 Bonds
Malvika Joshi
Oil-to-metals company Vedanta Resources Ltd. or VRL, is in talks with its relationship banks – Barclays, Citi, Deutsche Bank, JPMorgan and Standard Chartered Bank, for an around $500 million five-year club loan to partly refinance its two series of outstanding termed out 13.875% guaranteed bonds due 2028, a source close to and two sources familiar with the development said. The banks have yet to approve the loan, the sources said.
Separately, the company has also indicated to some fixed income investors this week that it is considering tapping its recently issued $900 million 10.875% bonds due 2029 to further raise around $300 million to also partly refinance the remaining termed out 2028 bonds, the two sources familiar said. Even as the tap has been discussed with the banks, the company will wait until price of the due 2029s to go up before it proceeds with the transaction, all three sources said.
Reorg first reported on Aug. 16 that the company plans to refinance its outstanding termed out guaranteed bonds – $470 million 13.875% bonds due 2027, $893.85 million, 13.875% due-December 2028s; and $1.01 billion, 13.875% due December-2028s – and $600 million non-guaranteed 2026 bonds in a staggered manner through additional debt guaranteed by subsidiaries –Twinstar Holdings and Welter Trading.
VRL raised $900 million in September and will use the proceeds to first refinance its $470 million 13.875% bonds due 2027 and then to partly refinance its $1.01 billion 13.875% bonds due 2028 with the remaining proceeds, as reported.
London-headquartered VRL is still trying to refinance the remainder of the two guaranteed series due 2028 and its $600 million 9.25% non-guaranteed bond due 2026 through a mix of bonds and loan, the first source close and the source familiar said, adding that the company is targeting to refinance the three series in the next 6-12 months.
Vedanta did not respond to requests for comment.
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