Standard Chartered Bank will underwrite $950 million of the $1.25 billion financing while New York-based Cerberus Capital will cover the remaining $300 million, the people said requesting anonymity. Other credit investors could join as Standard Chartered Bank is expected to distribute or “sell down” its share of the loan, they added.
The loan could have a tenor of about three years with interest rate in the ‘high teens’, the people said.
Standard Chartered Bank is in talks with Davidson Kempner, Ares Management and Varde Partners to distribute a portion of its $950 million loan commitment.
Vedanta Resources confirmed to ET that it was close to finalising the financing arrangement.
“We are in the process of finalising the raising of $1.25 billion for the purposes of refinancing and managing our upcoming maturities,” said a spokesperson for Vedanta Resources. “We are at an advanced stage of these discussions and continue to engage with bondholders simultaneously. The relevant details will be shared at an appropriate time.”Vedanta Resources needs to redeem $1 billion worth of bonds next month. It also needs to redeem a second set of bonds worth $950 million in August.
As per the financing terms, Vedanta Resources would have to reach a settlement with the existing bondholders of the January 2024 bonds and get them to agree to roll over a part of their dues to a future date. It may also require the company to repay about $350 million of debt it had taken from Oaktree Capital 3 years ago. The company had taken a $700 million loan from Oaktree in 2020.
The financing is likely to be backed by securitisation of receivables of Vedanta Resources such as royalties earned from group firms in India, said the people cited above.
Standard Chartered Bank declined to comment. Cerberus Capital did not respond to queries till press time.
“The transaction is at the documentation stage and could close by next weekend,” said one of the persons cited above.
JP Morgan, on behalf of Vedanta Resources, will be reaching out to bondholders once the financing is in place to restructure the bonds maturing over the next few months.
ET had first reported about the financing discussions between Vedanta Resources and Standard Chartered Bank and Cerberus Capital in two separate editions dated September 6 and November 2.
