India’s Vedanta secures funds at higher rates amid company rejig: bankers
According to the bankers, the company will offer a coupon of 12 per cent, payable on a quarterly basis to investors of the issue, which is unrated.
Anil Agarwal, group chairman of Vedanta Resources (India). (Photo by RODGER BOSCH/AFP via Getty Images)
THREE merchant bankers on Friday (29) said Vedanta Ltd, a subsidiary of Vedanta Resources in India, secured Rs 25 billion (£246.4 million) through the sale of 18-month maturity bonds at significantly elevated interest rates, Reuters reported.
According to the bankers, the company will offer a coupon of 12 per cent, payable on a quarterly basis to investors of the issue, which is unrated. They added that the coupon on an annualised basis works out to be around 13 per cent, the report added.
The rate is sharply more than what the company had paid for a 15-month bond issue in December, when it had raised Rs 8 billion (£78.8 million) and the coupon was linked to 91-day Treasury bill yield, which then worked out to around 8.79 per cent.
“The bond was privately placed to the investors which could and the investors are likely to be the private credit investors or family offices of Indian companies,” a banker said on the condition of anonymity.
Vedanta has pledged 100 per cent of the total share capital of subsidiary Sesa Iron and Steel for these bonds, which are unrated, data from National Securities Depository revealed.
The fundraising comes when the company is likely to commodities businesses into four firms to get better valuations, Reuters reported on Thursday, quoting an informed source.
The UK-based parent Vedanta Resources has huge debt maturities of over $4 billion (£3.27 billion) that will need to be refinanced in the next two years, IFR Asia reported quoting analysts.