Vedanta Plans $500 Million Loan Facility to Repay Bond in 2014

Vedanta Resources Plc (VED), the oil and metal producer controlled by Indian billionaire Anil Agarwal, plans a two-stage syndication to raise $500 million to repay a dollar-denominated bond obligation falling due early next year.

The London-based company hired Bank of America Merrill Lynch, Barclays Plc, DBS Group Holdings Ltd., Deutsche Bank AG, Royal Bank of Scotland Group Plc, Standard Chartered Plc to arrange the four-year borrowing, according to a person familiar with the matter. Vedanta has $500 million of an 8.75 percent dollar-denominated note due in January, according to data compiled by Bloomberg.

Pavan Kaushik, a spokesman for Vedanta based in the western Indian city of Udaipur, didn’t immediately reply to an e-mail and two telephone calls seeking comment on the financing.

The company is also marketing a separate five-year, $1.2 billion loan facility at a margin of as much as 275 basis points more than the London interbank offered rate, a separate person said Nov. 12. Proceeds from this borrowing will be used to refinance debt used to buy Cairn India Ltd. (CAIR) from Cairn Energy Plc and other investors in 2011.

That $8.67 billion deal helped Vedanta diversify into energy and tap Indian demand for oil, which the U.S. Energy Information Administration has estimated will grow 14 percent in the five years to 2015.

Vedanta has $16.9 billion-equivalent of bonds and loans outstanding, according to data compiled by Bloomberg. The company is the largest seller of dollar-denominated bonds from India in 2013, raising $1.7 billion, the data show. It also has raised $1.54 billion in syndicated loans this year.

To contact the reporter on this story: Anurag Joshi in Mumbai at ajoshi53@bloomberg.net

To contact the editor responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net

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