Vedanta gets $400 mn infusion from Oaktree
The notes will be partly secured by shares in Vedanta Ltd, according to separate exchange filings by the two sides
MUMBAI: A unit of Vedanta Resources will issue $400 million in notes to an entity under Oaktree Capital Group, as the mining conglomerate looks to meet liquidity needs.
The notes will be partly secured by shares in Mumbailisted unit Vedanta Ltd, according to separate exchange filings from Vedanta and the US hedge fund.
India’s macroeconomic troubles have attracted a wave of global investors betting they can eke out profits from the rising number of capital-starved businesses struggling to stay afloat.
Some global heavyweights including Oaktree and Apollo Global Management Inc. have either struck recent India deals or scaled up their teams in the country in a push to invest in distressed assets.
The new deal with Oaktree comes after Vedanta Resources sold $1 billion of securities earlier this month, at one of the highest yields for a dollar bond in Asia this year. That debt issuance was to fund a tender offer for securities due 2021.
The holding company, controlled by billionaire Anil Agarwal,
aims to simplify the group’s corporate structure and ease Vendata Resources’ access to cash after a failed attempt to delist Vedanta Ltd in October.
Elsewhere in India, Oaktree is bidding for shadow lender Dewan Housing Finance Corp., which was seized by the central bank last year. Read more about that here.
Earlier, the London-based Vedanta Resources raised its stake in Vedanta to 55.11% by buying from open market shares worth ₹2,959 crore.
Vedanta Resources bought 18.5 crore shares at a price of ₹159.94 per share, the company said in a statement on its website.
It made the purchase through block deals.
The purchase of shares in the open market helped the firm raise its stake in Vedanta Ltd to 55.11% from the current 50.13%.
Vedanta’s delisting failed due to an insufficient number of shares being offered in the buyback proposal of Vedanta Resources.
“This is in line with our stated strategic priority for simplifying the group structure to align the group’s capital and operational structures, streamline the process of servicing the
Group’s financing obligations and improve a range of important credit metrics,” it said.
The simplification process which has been underway for several years has involved mergers of group companies and may involve other share acquisitions in accordance with applicable law, the company said without elaborating. Vedanta Resources has also floated a special purpose vehicle, which submitted an expression of interest (EoI) for the government’s 52.98% stake in stateowned oil producer BPCL before the close of deadline on November 16.