Vedanta Group Firms Enter Into Facility Agreement For Rs 4,514 Crore
While Vedanta itself is not a party to the agreement, it imposes certain restrictions upon the company.
Vedanta Ltd. said on Monday that its promoter group entities entered into a facility agreement for about $530 million or about Rs 4,513.5 crore.
While Vedanta itself is not a party to the agreement dated April 17, it involves Vedanta Resources Ltd., Twin Star Holdings Ltd. and Welter Trading Ltd., according to an exchange filing.
No liabilities have been imposed on Vedanta. However, the quantification of the restrictions imposed on Vedanta via the facility agreement "is not ascertainable as they are in the nature of covenants", the disclosure added.
It added that the restrictions are effective and applicable from the first utilisation date, as defined under the terms of the facility agreement.
As part of the facility agreement, the borrower and the guarantors have agreed to ensure that Vedanta shall not undertake certain actions, unless the agreement allows it to.
Twin Star Holdings is the borrower, while Vedanta Resources and Welter Trading are the guarantors in the facility agreement.
All three group companies are related parties of Vedanta. While Twin Star Holdings has a 40.02% equity stake and Welter Trading holds 0.98% shares, Vedanta Resources has no direct shareholding in Vedanta.
Barclays Bank PLC., First Abu Dhabi Bank PJSC., Mashreqbank PSC., Deutsche Bank AG's Singapore branch, and Standard Chartered Bank's Mauritius and GIFT City branches were the lenders involved, while Madison Pacific Trust Ltd. was the agent in the facility agreement.
The filing clarified that the facility agreement does not classify as a related-party transaction. The covenants in the agreement include the restriction on Vedanta from creating security over its assets.
It also doesn't allow Vedanta from selling, transferring, and disposing of assets that are not in the ordinary course of business, without the consent of the lenders.
The deal also restricts Vedanta from investing in or acquiring material assets/business/shares that are not associated with mining, metals, coal, oil and gas exploration and/or production, infrastructure, power or energy industries.
It restricts Vedanta from undertaking any merger, or amending its constitutional documents in a way that affects the rights of the lenders or has a material adverse effect under the agreement.
According to the agreement Vedanta can't grant a loan to or guarantee any indebtedness of the promoter or any affiliate.
Shares of Vedanta closed 3.03% higher at Rs 412.10 apiece on the BSE, compared to a 1.09% advance in the benchmark Sensex. However, the company’s announcement was filed after the stock markets closed for Monday.
