Vedanta Resources has raised an additional USD 300 million through a tap issue on its existing bonds. This move, which follows its earlier USD 900 million bond issue, aims to improve liquidity and manage the company's debt structure, according to a company statement.
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Vedanta raises USD 300 million through tap issue to manage debt
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- Vedanta raises USD 300 million via bond tap issue
- Funds to prepay 2028 bonds with high interest
- Issue received strong interest, oversubscribed to USD 500 million
Vedanta Resources, the parent company of Mumbai-based mining conglomerate Vedanta Ltd, has raised an additional USD 300 million by exercising a tap option on its existing bond issue. A tap issue allows a company to release more bonds from a previous issue, enabling them to secure further financing under the same terms.
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According to PTI, in a filing with the Singapore Exchange, Vedanta Resources Finance II PLC (VRF), a wholly-owned subsidiary of Vedanta Resources Ltd, confirmed it had raised the additional USD 300 million on top of its September USD 900 million bond issuance. The new tranche, issued at a yield of 9.99 per cent, forms part of Vedanta's broader efforts towards liquidity management and reducing its debt burden.
The new issue saw strong demand, receiving final orders of over USD 500 million from both existing and new investors, leading to an oversubscription. Of the total allottees, 67 per cent came from the Asia-Pacific (APAC) region, 26 per cent from Europe and the Middle East, and 7 per cent from the United States. The bonds carry a 'CCC+' rating from S&P Global Ratings.
As per the filing, the funds raised from this tap option will be used to partly prepay Vedanta's outstanding USD 608 million bond, which carries a 13.875 per cent coupon and matures in 2028. This move is aligned with the company’s ongoing strategy to manage its capital structure by reducing its debt load.
Vedanta's Chief Financial Officer, Ajay Goel, expressed his satisfaction with the positive response to the latest offering. He said, "We are thrilled by the tremendous response to our tap offering, coming so soon after our initial USD 900 million bond issue in September 2024. This highlights the strong confidence the global investor community has in Vedanta's solid business performance and our commitment to deleveraging our balance sheet."
Goel further emphasised that the company remains focused on delivering significant value for both its global and domestic investors in the future.
This recent tap issue follows Vedanta Resources' initial bond raise of USD 900 million in September, which was its first dollar-denominated bond issue in over two years. That bond had a coupon rate of 10.875 per cent for a five-year term. Vedanta had used the proceeds from the earlier issue to prepay other existing bonds, and it had garnered interest from over 100 investors worldwide, including those based in the USA, Europe, and the Middle East.
The latest bond issuance reinforces Vedanta's strategic effort to optimise its financial position, ensuring long-term growth while managing its obligations effectively.
The new issue saw strong demand, receiving final orders of over USD 500 million from both existing and new investors, leading to an oversubscription. Of the total allottees, 67 per cent came from the Asia-Pacific (APAC) region, 26 per cent from Europe and the Middle East, and 7 per cent from the United States. The bonds carry a 'CCC+' rating from S&P Global Ratings.
As per the filing, the funds raised from this tap option will be used to partly prepay Vedanta's outstanding USD 608 million bond, which carries a 13.875 per cent coupon and matures in 2028. This move is aligned with the company’s ongoing strategy to manage its capital structure by reducing its debt load.
Vedanta's Chief Financial Officer, Ajay Goel, expressed his satisfaction with the positive response to the latest offering. He said, "We are thrilled by the tremendous response to our tap offering, coming so soon after our initial USD 900 million bond issue in September 2024. This highlights the strong confidence the global investor community has in Vedanta's solid business performance and our commitment to deleveraging our balance sheet."
Goel further emphasised that the company remains focused on delivering significant value for both its global and domestic investors in the future.
This recent tap issue follows Vedanta Resources' initial bond raise of USD 900 million in September, which was its first dollar-denominated bond issue in over two years. That bond had a coupon rate of 10.875 per cent for a five-year term. Vedanta had used the proceeds from the earlier issue to prepay other existing bonds, and it had garnered interest from over 100 investors worldwide, including those based in the USA, Europe, and the Middle East.
The latest bond issuance reinforces Vedanta's strategic effort to optimise its financial position, ensuring long-term growth while managing its obligations effectively.
(With inputs from PTI)
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