India-listed Vedanta has raised funds around the time its holding company is working round the clock to arrange funds to refinance its upcoming USD 1 billion bonds, which are due January 2024.
Three different funds of Oaktree Capital provided debt to Vedanta Ltd by subscribing to the secured, unlisted non-convertible debentures (NCD).
Oaktree has stipulated that Vedanta would have to pay 17% interest on the debt in the event of default, the people said. The proceeds will be used for general corporate purposes.
Vedanta has pledged 100% of shares of Sesa Iron and Steel Ltd as security for debt availed from Oaktree.
Oaktree declined to comment. Vedanta did not respond to ET’s request for comment.Vedanta, a metals-to-mining conglomerate founded by Anil Agarwal, has proposed splitting its business into five units – aluminium, oil and gas, base metals, steel and ferrous and power generation.OCM India Opportunities XII Alternate investment Fund provided Rs 2487 crore, OCM India Opportunities XB Alternate investment Fund subscribed to Rs 293 crore, and OCM India Opportunities XI Alternate investment Fund was Rs 619 crore. Oaktree Capital operates all the three funds.
This is the second investment by Oaktree in Vedanta within 3 three months. Oaktree Capital Management provided Rs 2500 crore debt to India-listed Vedanta, as reported by ET on October 4.
At that time, Oaktree provided debt in the form of NCD at a 12% coupon while Vedanta had pledged shares of Sesa Iron and Steel as security.
The parent company, Vedanta Resources has three bonds totalling USD 3.2billion maturing between 2024 and 2025. In September, Vedanta launched a liability management exercise to restructure the terms of the bonds.
Holders of guaranteed bonds of USD 1 billion due in January and USD 1.2billion in March 2025 formed an ad hoc group led by Oaktree Capital Management and Avenue Capital to negotiate better terms for the three bonds. It advised investors to reject the proposed bond restructuring.
However, the ad hoc group itself split, which lowered the chances of investors blocking the bond recast plans.
Vedanta Resources said that it was confident of restructuring the bonds, as reported by ET on December 21.
For the January 2024 bonds, bondholders offered a 53% cash payment and a 2% consent fee, maturing in January 2027. The August 2024 bonds receive a 6% upfront payment, and March 2025 bonds receive a 16% upfront payment, each with early and late consent fees.
