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Vedanta Resources on Friday said it has raised USD 1.2 billion in a bond offering that saw strong investor interest. The 8.95 per cent bonds due for March 2025 “will be guaranteed by the company and two wholly-owned indirect subsidiaries of the company, namely Twin Star Holding Ltd and Welter Trading Limited,” it said in a statement.
Vedanta said it will use the proceeds of the bonds for the acquisition of equity shares of the Indian subsidiary as well as servicing existing debt. The company is looking to buy as many as 37.17 crore or 10 per cent of its India unit, at Rs 160 per share. At that price, the total consideration of the deal would be about Rs 5,948 crore (USD 814 million).
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Vedanta Resources Finance II Plc, a subsidiary of London-based Vedanta Resources, had gone to the market for raising USD 1 billion. It got USD 2.6 billion in offers from about 150 accounts, representing the largest oversubscription on a recent US dollar bond offering by the company, banking sources said.
The trade was well-received across geographies with APAC (Asia-Pacific), EMEA (Europe, Middle-East and Africa) and North America constituting 49 per cent, 30 per cent, and 21 per cent of the final allocation, respectively. The strong interest from investors also helped the company upsize the transaction to USD 1.2 billion from an initial indication of USD 1 billion.
At the same time, the strong demand enabled the company to tighten pricing by 42.5 basis points during the book-building process, they said. Having failed in its attempt to delist its Indian subsidiary Vedanta Ltd, parent firm Vedanta Resources last month announced an open offer to buy up to 10 per cent of its shares.
Vedanta’s shares on Friday closed at Rs 206.90 apiece on the BSE, down 0.5 per cent over the previous day’s closing. In October last year, Vedanta Resources had failed to garner the required number of shares to delist its Indian arm at the offer price of Rs 87.5 apiece.
Thereafter, promoters had increased their stake from 50.14 per cent to 55.04 per cent through block deals totaling Rs 2,959 crore. At the time of raising its stake in December 2020, Vedanta Resources had said the move was aimed at simplifying the group structure.
“This is in line with our stated strategic priority for simplifying the group structure to align the group’s capital and operational structures, streamline the process of servicing the Group’s financing obligations and improve a range of important credit metrics,” it had said. The simplification process, which has been underway for several years, has involved mergers of group companies and may involve other share acquisitions in accordance with applicable law, the company had said.
