Vedanta Resources open to changing terms of proposal to delay bond payment

By Saikat Das, Megawati Wijaya and Suvashree Ghosh

Representatives of Vedanta Resources Ltd told investors they’re open to revising a proposal to delay payments on the miner’s dollar bonds, according to people familiar with the matter, after debt holders pushed back on initial terms.

 

Some bondholders said they wanted more cash up front than what was offered by the company, said some of the people, who asked not to be named because the discussions are confidential. Other investors urged changes to the collateral for some debt and a date for asset sales, people said. 

“Discussions with bondholders are ongoing and feedback continues to be both solicited and provided,” a spokesperson for the company told Bloomberg. “There is no conclusion on the form or shape of any exercise at this stage.” 

Billionaire Anil Agarwal’s miner is looking to raise funds as it faces roughly $2 billion worth of debt maturing next year. Moody’s Investors Service flagged the risk of a debt restructuring when it cut the company deeper into junk last week. 

Vedanta has approached investors, seeking to pay back just a portion of its dollar bonds maturing in 2024 and 2025 in cash, with the remainder of the principal deferred for three years. The plan would see it repay about half of the January 2024 note’s principal and a smaller proportion on the March 2025 debt. 

Vedanta is also in talks with distressed investors to raise $1 billion via a private loan, while India-based unit Vedanta Ltd is due to be split into six entities. 

Agarwal said earlier this week that Vedanta had lined up funds to pay back debt, according to an interview with CNBC-TV18. Ratings agency Crisil said it understood that a refinancing plan would likely get executed on by the end of October. 

But the India subsidiary split-up plan has complicated talks for the $1 billion loan, which is to be used for debt repayment. It probably won’t be finalized this month, as some lenders anticipated, Bloomberg reported earlier this week.