Vedanta Resources raises $1.25 billion loan from global private credit lenders

The transaction is crucial for the group to avoid a potential default.

Vedanta Resources Ltd (VRL), the holding company of the Vedanta group, said on Wednesday that it secured $1.25 billion from private credit lenders for debt refinancing and a new credit facility.

In a late-night statement, the company said that fundraising will help create a long-term sustainable capital structure and demonstrate its continued ability to access global capital markets and investor confidence in the underlying business. VRL said the loan was raised from a group of reputable financial institutions to refinance existing liabilities. The company did not disclose the names of the lenders.

VRL said it is also seeking to amend certain covenants and waivers to improve the credit package of its bonds that are due to mature in 2024 and will announce the outcome of the consent solicitation from existing lenders in due course. It said that the aforesaid loan will mature in April 2026, and is guaranteed by VRL and its various subsidiaries, and has been collateralised by a negative pledge of 13.26% shares held by the parent in India-listed Vedanta Ltd and the annual brand fee it receives from various subsidiaries.

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Moneycontrol reported on December 5 that billionaire Anil Agarwal-led Vedanta Resources will sign a $1.2 billion loan agreement with a clutch of global private credit funds to partly repay $3.2 billion of bonds maturing in 2024 and 2025,

Citing people familiar with the matter, the report said that the funding round is being led by New York-based Cerberus Capital Management, which will underwrite about $300 million, followed by others, including Ares SSG Capital Management, Davidson Kempner Capital Management and Varde Partners.

The transaction is crucial for the group to avoid a potential default. Moneycontrol reported that the loan will be priced upwards of 18 percent per annum. The mining and metals conglomerate has $1 billion of 13.875 percent bonds coming up for repayment in January, another $1 billion of 6.125 percent paper due in August 2024, and $1.2 billion of 8.95 percent bonds maturing in March 2025.