Vedanta Resources Ltd on Thursday said it has raised $1.4 billion (around Rs 10,500 crore) via bonds, which would be primarily used to fund the delisting of its Indian flagship firm.
"Vedanta Resources Ltd (VRL) hereby announces the successful pricing of senior secured bonds. The issue size was $1.4 billion, comprising three-year amortising bonds, with an annual coupon rate of 13 per cent," the company said.
Funds from the bond issuance will primarily be used to support the intended offer to buy out the equity shares of Vedanta Ltd (VDL) that are held by public shareholders, the statement said.
The bond issuance follows the commitments for $1.75 billion that VRL had received earlier for a three-month term loan facility, taking the total amount of debt to $3.15 billion across global debt markets.
Billionaire Anil Agarwal-controlled Vedanta Ltd has already received shareholders' nod for delisting the company.
The issuance size was increased to $1.4 billion from initial indication of $1 billion in order to provide VRL with additional flexibility to also redeem a portion of its $670 million outstanding 2021 bonds, it said.
"Upon completion of all payment obligations as required under the delisting regulations, any balance funds available shall be used to fund either (a) a potential tender offer of the 2021 bonds at par or (b) a repayment of the 2021 bonds at maturity," the statement said.
"This completes VRL's planned fund-raising programme in preparation for the proposed delisting of its subsidiary VDL, as we believe this is the maximum incremental leverage we can consider in our capital structure," it said.
The proceeds of the bonds will be deposited into an offshore escrow account pending a successful conclusion of the bidding process under the delisting regulations, resulting in delisting of VDL's shares and will be used to redeem the bonds in the event that the delisting is unsuccessful by a certain long-stop date, the company said.
The bank debt package will also be unwound in the event of an unsuccessful delisting, it added.
The proposed financing package will support a fair offer to shareholders while balancing the needs of VRL's debt providers and other stakeholders.
VRL will at the appropriate times take the necessary steps to proceed with the delisting offer as required under the delisting regulations, it said.
"The bonds are being offered and sold in a private offering to qualified institutional buyers under Rule 144A of the US Securities Act and non-US persons outside the United States under Regulation S under the US Securities Act," the statement said.
"Approval in-principle has been received from the Singapore Exchange Securities Trading Limited (the 'SGX-ST') for the listing of and quotation of the bonds on the SGX-ST," the statement said.
Admission for the listing and quotation of the bonds on the SGX-ST is not to be taken as an indication of the merits of the offering, Vedanta or the bonds, the company said.