Vedanta Resources secures $1.25 billion loan for debt refinancing
What's the story
Vedanta Resources Ltd (VRL), the parent company of Vedanta Group, announced that it has secured $1.25 billion from private credit lenders.
This will be used to refinance debt and establish a new credit facility.
This fundraising effort aims to establish a long-term sustainable capital structure and showcase the company's ongoing ability to access international capital markets.
VRL obtained the loan from a group of reputed financial institutions, without revealing their names, to refinance existing liabilities.
Details
Loan details and credit package amendments
VRL is also working to amend certain waivers and covenants to enhance the credit package of its bonds, which are set to mature in 2024.
The results of the consent solicitation from current lenders will be revealed in due course. The loan, maturing in April 2026, is guaranteed by VRL and its subsidiaries.
It is collateralized by a negative pledge of 13.26% stocks held by the parent company in locally-listed Vedanta Ltd and the annual brand fee received from subsidiaries.
What Next?
Crucial transaction to avoid potential default
This transaction is vital for the group to prevent a possible default.
Moneycontrol reported earlier this month that VRL will ink a $1.2 billion loan agreement with private credit funds to partially repay $3.2 billion of bonds maturing next year and 2025.
Cerberus Capital Management is leading the funding round, underwriting about $300 million, followed by others such as Ares SSG Capital Management, and Varde Partners.
The loan will be priced at over 18% per annum.
Payments
Future payments for VRL
In January, the mining and metals conglomerate has $1 billion of 13.875% bonds coming up for repayment. Another $1 billion of 6.125% bonds is due in August next year, and $1.2 billion of 8.95% bonds will mature in March 2025.