Vedanta Raises Additional Rs.2,500 Crore via NCDs
Vedanta Ltd (VDL), the Indian subsidiary of Vedanta Resources, raised 2,500 crore on Sept 29 through unrated, unlisted, non-convertible debentures with a maturity period of one year and six months and an interest rate of 12%.
VDL has pledged 100% of the whole share capital of its subsidiary Sesa Iron and Steel to support this bond offering.
VDL aims to use the bond proceeds to cover capital expenditure requirements or to repay these term loans.
As earlier reported by ET on September 17, the company faces two separate term loan repayments of 300 crore and 1,000 crore, due on November 14, 2023 and March 31, 2024, respectively.
VDL gained board approval on 21 September to finance up to 2,500 crore through non-convertible debentures in a private placement.
Vedanta Resources, VDL's parent firm, is in serious financial trouble.
Vedanta Resources was downgraded to CCC by S&P Global Ratings on Sept 29, citing potential bond extensions, and was placed on credit watch negative due to an increased risk of liability management activities. Despite a high possibility of fulfilling the January 2024 bond payment, S&P warned that VRL has limited alternative funding sources and a $600 million funding gap.
Vedanta Resources has initiated discussions with bondholders to address bonds maturing in 2024 and 2024, including $1 billion maturing in January.