Vedanta Resources plans to syndicate a $1 billion short-term loan and is in advanced talks with global private credit funds including Cerberus Capital, Bain Capital, Ares SSG Capital and Davidson Kempner. The loan will be used for part-paying $3.2 billion of bonds maturing in 2024 and 2025.
The company is simultaneously in talks with bondholders to change timelines for repayment and other terms on a sizeable portion of the $3.2 billion bonds. Recently at roadshows in Hong Kong, Singapore and London with bondholders, senior executives proposed prepaying 30% of bonds upfront, sources aware told ET.
With $1 billion of 13.875% bonds coming up for repayment in January, the conglomerate has another $1 billion of 6.125% paper due in August 2024, and $1.2 billion of 8.95% bonds maturing in March 2025.
During the roadshow, the group also informed bondholders that it has initiated talks with potential buyers to raise funds by divesting its steel and mining assets.
Such a divestment may take up to 15 months to conclude as per the group's internal estimates, people in the know said.
"Vedanta is in continuous discussions with its bondholders in the ordinary course including to address upcoming maturities. The company is in discussion with numerous parties in both the bank and fund community in addition to existing bond holders as it explores various options," a Vedanta Group spokesperson told ET.
"Further, the potential divestment of the iron and steel business is just one of the many strategic options that we may explore at an appropriate time. However, the upcoming debt maturities and repayment to our bondholders at the Vedanta Resources level is in no way connected to any asset review process that has been announced by (India unit) Vedanta Ltd. There has been no conclusion on the strategic review of these assets at this time," the spokesperson added.
Last week, S&P Global Ratings warned the Vedanta group of a possible downgrade of the offshore bonds if it fails on adequate compensation to bondholders.
The ratings agency had revised Vedanta Resources' rating outlook to 'negative' in August. It raised concerns about the group's ability to refinance the upcoming liabilities.
Vedanta Resources has $1.3 billion of liabilities due in FY24 and $4.3 billion in FY25, according to a Standard Chartered Bank note. It had $5.9 billion of debt, including $3.7 billion of bonds, at the end of June.
