Vedanta Resources Ltd., the parent firm of Mumbai-based mining conglomerate Vedanta Ltd, has raised $300 million by exercising the tap option on the existing bond issue. A tap issue is a procedure that allows companies to issue bonds or other short-term debt instruments from past issues.
In a Singapore exchange filing Vedanta Resources Finance II PLC (VRF), a wholly-owned subsidiary of Vedanta Resources, said it has exercised a tap option on its September $900 million bond issuance, raising a further $300 million at a yield of 9.99%, continuing its liquidity management exercise.
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The new issuance received final orders of over $500 million, an oversubscription from existing and new investors. Sixty-seven per cent of the allottees were from the Asia Pacific (APAC) region, 26% from Europe and the Middle East, and seven per cent from the Offshore United States.
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The bonds are rated 'CCC+' by S&P Global Ratings.
"The net proceeds from the tap option will be used to partially prepay Vedanta's $608 million 13.875% bonds due 2028," the company said.
Vedanta Chief Financial Officer Ajay Goel said that the company is thrilled by the tremendous response to its tap offering, soon after the issuance of our $900 million bonds in September 2024.
This underscores the huge confidence of the global investor community in Vedanta's robust business performance and our commitment towards attaining a balanced capital structure through deleveraging our balance sheet, he said.
"We are confident of continuing to deliver substantial value for our global and domestic investors in the years ahead," Goel added.
In September, Vedanta Resources had raised $900 million in its first dollar bond issue in more than two years to prepay existing bonds. The $900 million raise was at a coupon rate of 10.875% in a five-year US dollar-denominated bond.
It received subscriptions from over a hundred investors, including those from the USA, Europe, and the Middle East.
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