Vedanta set to launch $1 billion bond offering

New Delhi: Resources is set to launch fresh bonds worth $1 billion to international investors this week, its third such offering in six months, as the metal and mining giant attempts to address its debt burden while pursuing aggressive expansion plans, according to people aware of the matter.

The Anil Agarwal-led company is in discussions with international banks such as JP Morgan to arrange its latest offering. The structure of the issuance is still being decided. Several banks are likely to join as arrangers, the people said.

Vedanta declined to comment.

The company’s previous issue of bonds worth a similar value in December offered the highest yields in Asia at the time as the company had to raise money under pressure from lenders to refinance existing debt that matures this year. Those bonds offered investors a coupon of 13.875%. Its upcoming offering could be used for general corporate purposes and partially to retire existing high-cost bonds prematurely. It has a $1billion bond maturing in July 2022.

The company is pursuing aggressive acquisition plans and has disclosed it is in the race for state-owned Bharat Petroleum Corporation, a purchase that could cost several billion dollars. It recently emerged as the winner of a bidding process for


Vedanta Resources owns over 50% in India-listed Vedanta Ltd., which houses the group’s various metal, mining and oil and gas interests and has cash-rich subsidiaries such as Hindustan Zinc.

The parent company has debt worth $3.3 billion maturing from April 2021 through September 2022.

Vedanta Set to Launch $1Billion Bond Offering

Rating company Moody’s downgraded the outlook on Vedanta Resources to negative and warned investors in a February 17 note that the company’s high debt burden remained a challenge.

“The negative outlook primarily reflects holdco VRL’s ongoing weak liquidity and challenges it faces for refinancing the holdco’s upcoming significant debt maturities,” Moody’s vice president Kaustubh Chaubal said in the note.

“Moody’s noted that Vedanta Ltd.’s operating performance was improving and the company could achieve consolidated revenue of $9.5-10 billion by the end of the current financial year with consolidated earnings before interest, tax, depreciation and amortisation of $3.5-3.6 billion”

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