Vedanta raises $400 m from Oaktree

Our Bureau Mumbai | Updated on December 29, 2020

The new deal with Oaktree after Vedanta Resources sold $1 billion of securities earlier this month   -  Arunangsu Roy Chowdhury

Move to meet its liquidity needs

Vedanta Resources, the holding company of Vedanta, will issue $400 million in notes to an entity of US-based hedge fund Oaktree Capital Group to meet its immediate liquidity requirements.

The notes issued will be partly secured by shares in stock exchange listed Vedanta, according to exchange filings by the company.

As per the subscription agreement signed, Vedanta promoter companies Vedanta Holdings Mauritius II, Finsider International Company, Vedanta Resources, Westglobe will issue notes worth $400 million of nominal value of $1 in favour of OCM, subject to certain conditions.

Also read: Vedanta promoter buys back shares worth ₹2,959 crore via bulk deal

Pursuant to subscription pact, a charge has been created on all the shares held by Finsider International Company and Westglobe in favour of OCM to secure the obligation of the issued notes, said Oaktree in a statement.

As per the agreement, Vedanta promoter group entities are restricted in creating any security, sell, lease, transfer or otherwise dispose of any of their shares in Vedanta held by them, it added.

The new deal with Oaktree after Vedanta Resources sold $1 billion of securities earlier this month, at one of the highest yields for a dollar bond in Asia this year. That debt issuance was to fund a tender offer for securities due 2021.

Failed delisting bid

The fund raising comes close on the heels of promoter group company Vedanta Holdings Mauritius hiking stake in its subsidiary Vedanta by 4.98 per cent with an investment of ₹2,959 crore ($406 million).

In May, billionaire Anil Agarwal-owned Vedanta announced a delisting offer at ₹87.5 a share but failed to garner minimum required shares to make the buyback a success.

Interestingly, LIC, which held 6.37 per cent in Vedanta, submitted all its shares at a price of ₹320, a 267 per cent premium over the floor price of ₹87.25 upsetting Vedanta’s calculations.

The total number of shares validly tendered by the public shareholders in the delisting offer was 125.47 crore, which was less than the minimum number of shares required to be accepted by the acquirers in order for the delisting offer to be successful.

Published on December 29, 2020

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