Of the amount in question, $1 billion was raised by Vedanta Resources from the bond market. This is set to mature in 2024 and carries an interest rate of 6.125 per cent, the company stated. In January, the Anil Agarwal-led company had raised another $1 bn from the bond market for a tenure of five years, at an interest rate of 6.375 per cent, to refinance its near-term debt (2018 and 2019 bonds).
Vedanta said it would use the net proceeds to fund its new offers to purchase for cash any and all of its outstanding $774.77-million, six per cent, bonds due in 2019, and another issue of $900-million, 8.25 per cent, bonds due in 2021. And, to repay other existing debt.
"The transaction is in line with our stated financial strategy to strengthen our balance sheet. We have taken a number of pro-active measures over last year to extend maturities and optimise our funding structure...we are pleased with the strong response these bonds have received, displaying investor confidence in Vedanta's credit story," the company quoted Anil Agarwal, chairman.
The company said it tapped liquidity from both the bank and bond markets in Asia, Europe and North America. Of the entire $1.8 bn raised, the company got commitments from global and Indian banks for $840 million of term loans, with final maturity of five years. Both global and Indian banks lent to Vedanta for these term loans — over half the lenders were global.
For the financial year ended March 2017, Vedanta Resources had $11.5 bn in revenue, with operating earnings of $3.2 bn, having generated free cash flow of $1.5 bn. It was given a 'stable' credit rating by both Moody's and S&P, says the company's website.
Vedanta PLC Maturities
* Gross debt reduction and maturity extension
* Deleveraged $450 mn after April 1, 2017
* Issued $1bn bond at 6.375% with 5.5 year tenor in Jan 2017 to refinance 2018 and 2019 bonds
* S&P upgraded the issuer credit rating to B+(Stable); Moody’s upgraded the CFR to B1 (Stable)
Source: Vedanta Resources; Credit Summary FY2017 (As of March 31, 2017)