Vedanta Secures $1.25 Billion from Private Credit Lenders for Debt Refinancing

14 Dec 2023 , 12:39 PM

Vedanta Resources Ltd (VRL) secures $1.25 billion from private credit lenders for debt refinancing and a new credit facility. The fundraising aims to create a long-term sustainable capital structure and demonstrates continued access to global capital markets and investor confidence in the underlying business.

The loan is obtained from a group of reputable financial institutions to refinance existing liabilities, and the company has not disclosed the names of the lenders.

VRL is seeking to amend certain covenants and waivers to enhance the credit package of its bonds maturing in 2024, with the outcome of the consent solicitation from existing lenders to be announced in due course.

The loan, maturing in April 2026, is guaranteed by VRL and its subsidiaries, collateralized by a negative pledge of 13.26% shares held by the parent in India-listed Vedanta Ltd and the annual brand fee from subsidiaries.

Vedanta Resources plans to sign a $1.2 billion loan agreement to partly repay $3.2 billion of bonds maturing in 2024 and 2025.

The funding round is led by Cerberus Capital Management, underwriting about $300 million, with participation from Ares SSG Capital Management, Davidson Kempner Capital Management, and Varde Partners.

The loan is crucial for the group to avoid potential default, priced upwards of 18 percent per annum, with significant bonds coming up for repayment in January, August 2024, and March 2025.

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