The mining and metals conglomerate has $1 billion of 13.875% bonds coming up for repayment in January, another $1 billion of 6.125% paper due in August 2024, and $1.2 billion of 8.95% bonds maturing in March 2025.
The company is simultaneously in talks with bondholders to change repaying timelines and other terms on a sizable portion of the $3.2 billion bonds. At recent roadshows in Hong Kong, Singapore and London with bondholders, senior executives proposed prepaying 30% of bonds upfront, a third person said.
The plan involved rolling over the remaining 70% over three years, the person said.
The proposed fundraising from private credit providers will be used to make the upfront payment to bondholders, the two people cited earlier said.
Vedanta Resources also informed bondholders during the roadshow that the group aims to raise funds by divesting its steel and mining assets and has initiated talks with potential buyers for the same. Such a divestment may take up to 15 months to conclude as per the group’s internal estimates, people in the know said.”Vedanta is in continuous discussions with its bondholders in the ordinary course including to address upcoming maturities. The company is in discussion with numerous parties in both the bank and fund community in addition to existing bond holders as it explores various options,” a Vedanta Group spokesperson said in an emailed response to ET’s queries.”Further, the potential divestment of the iron and steel business is just one of the many strategic options that we may explore at an appropriate time. However, the upcoming debt maturities and repayment to our bondholders at the Vedanta Resources level is in no way connected to any asset review process that has been announced by (India unit) Vedanta Ltd. There has been no conclusion on the strategic review of these assets at this time,” the spokesperson added.
Bain Capital and Davidson Kempner declined to comment. Cerberus Capital and Ares SSG did not respond to ET’s emails seeking comment.
Last week, S&P Global Ratings warned of a possible downgrade of the offshore bonds if the company fails to compensate bondholders adequately. In August, the ratings company had revised Vedanta Resources’ rating outlook to ‘negative’, raising concerns about its ability to refinance the upcoming liabilities.
The conglomerate has been struggling to raise fresh capital to meet the upcoming debt maturities. Vedanta Resources has $1.3 billion of liabilities due in FY24 and $4.3 billion in FY25, according to a Standard Chartered Bank note. It had $5.9 billion of debt, including $3.7 billion of bonds, at the end of June.
