Vedanta Resources on Friday announced pricing of $1 billion of 6.125% bonds due in 2024. The company intends to use the net proceeds from this offering primarily to fund its offers to purchase for cash any and all of its outstanding $774.77 million 6.00% bonds due in 2019, and $900 million 8.25% bonds due in 2021, and to repay other existing indebtedness, it said in a statement issued from London. Vedanta said it has received and accepted for purchase $522.51 million of the 2019 bonds and $229.84 million of the 2021 bonds. “This comprehensive refinancing plan announced earlier by the company is leverage neutral and is funded through a mix of bonds and term loans. The company has received commitments from global and Indian banks for $840 million of term loans with final maturity of 5 years,” the statement said.
On successful completion of the transactions, Vedanta will refinance part of its 2019 and 2021 bond maturities and is expected to have no significant bank loan repayments due over the next 18 months. These transactions will extend the company’s average debt maturity by 1.5 years and lower its average cost of borrowing. The company said the bond coupon of 6.125% for the seven-year maturity compares favourably to its previous bond offering in January this year. The maturity period for the previous offering was five-and-a-half years with the coupon rate of 6.375%.
Anil Agarwal, chairman of Vedanta Resources, said, “The transaction is in line with our stated financial strategy to strengthen our balance sheet. We have taken a number of proactive measures over the last year to extend maturities, optimise our funding structure and as a result have created value for all stakeholders.” The bonds are being offered and sold in a private offering to qualified institutional buyers under Rule 144A of the Securities Act of 1933 as amended (“Securities Act”) and outside the US under ‘Regulation S’ under the Securities Act.