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Vedanta Resources plans investor calls for a possible dollar bond sale on Monday
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Proceeds from the bond would refinance higher-cost private debt from 2023
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Vedanta’s net debt fell to $4.9 billion in March from $8.9 billion in March 2022
Billionaire Anil Agarwal’s Vedanta Resources Ltd. plans to hold talks Monday with investors on a possible dollar bond sale whose proceeds would help repay higher-cost debt from private lenders.
The Indian minerals conglomerate appointed banks to arrange investor calls in Asia, Europe and the US for a seven-year note that cannot be called in the first two years, according to a person familiar with the matter who asked not to be identified as the discussions are private. The company intends to use the proceeds of the offering together with existing bank loans to repay the private debt, the person said.
Vedanta is looking to tap the dollar bond market after borrowing costs for junk-rated Asian issuers declined to their lowest in more than four years in September, opening a window for the firm to refinance private debt that it took out at an interest rate of 18% in 2023. The offering would be the second bond sale by the Indian conglomerate in the US currency this year after it sold notes in January, if the deal proceeds.
Following the issuance, Vedanta’s cash sources should be largely sufficient to cover its interest and debt servicing needs through September 2026, Moody’s analysts including Nidhi Dhruv wrote in a note Monday.
The proposed dollar issuance shows the continued efforts of the firm to reduce debt and cut credit costs. Net debt at Vedanta Resources stood at $4.9 billion in March, down from $8.9 billion in March 2022, according an investor presentation document from the firm.
Vedanta Resources notes due in December 2031 climbed to 106.4 cents last week after touching a 2025 low of 90.7 cents in April, according to data compiled by Bloomberg. The note is one of the best-performing junk bonds from India this year.
Still, the company is also coping with headwinds. The miner is facing a delay in getting court approval to split its India unit Vedanta Ltd. into five listed entities. A failed demerger could hinder the company’s growth, including a $10 billion three-year capital expenditure plan to boost capacity and earnings, said Mary Ellen Olson, senior credit analyst at Bloomberg Intelligence in a note last week.
Vedanta Ltd.’s bid to acquire insolvent infrastructure developer Jaiprakash Associates Ltd. has resulted in analyst concerns that the company is getting into unrelated businesses.
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