EM-focused Vedanta gets needed consents to amend six bond series

By Marisa Wong

Los Angeles, June 30 – Vedanta Resources Ltd. (formerly Vedanta Resources plc) and Vedanta Resources Finance II plc announced the results of their consent solicitations for six series of bonds.

Holders had voted in favor of the extraordinary resolution at each of the bondholder meetings held on June 30, approving the proposed amendments for each bond, according to a company notice.

Vedanta executed a supplemental trust deed on Tuesday amending each of the following bonds:

• $900 million of 8¼% bonds (ISINs: USG9328DAG54, US92241TAG76) due 2021;

• $1 billion of 6 3/8% bonds (ISINs: USG9328DAM23, US92241TAK88) due 2022;

• $500 million of 7 1/8% bonds (ISINs: USG9328DAJ93, US92241TAJ16) due 2023;

• $1 billion of 6 1/8% bonds (ISINs: USG9328DAP53, US92241TAM45) due 2024;

• $400 million of 8% bonds (ISINs: USG9T27HAB07, US92243XAB73) due 2023; and

• $600 million of 9¼% bonds (ISINs: USG9T27HAA24, US92243XAA90) due 2026.

The proposal

As announced on June 5, the company was seeking to amend the condition on the limitation on borrowings and align the condition regarding negative pledge consistently across each series of bonds.

Vedanta Ltd. is an indirect subsidiary of Vedanta Resources Ltd. and its subsidiaries. The parent intends to take Vedanta Ltd. private by acquiring all of the fully paid-up equity shares of public shareholders.

As previously reported, the intent is to simplify the company’s corporate structure. The simplification process is intended to enhance operational and financial flexibility by streamlining the group’s debt servicing and improve its creditworthiness.

However, to take Vedanta Ltd. private, there will be a temporary increase in the company’s net leverage. Therefore, the company needs headroom under the debt covenant in the terms and conditions in respect to each series of bonds to do this.

Furthermore, commodity prices are weak and may remain weak, and the company’s operations may be adversely impacted by the coronavirus pandemic.

Therefore, the company was also seeking flexibility to refinance existing debt and use group entities where there is significant debt capacity for such purpose, to incur debt for working capital purposes and to have the ability to complete strategically important capital expenditure even in the middle of a commodity downturn.

Consent fees

An early consent fee will be paid on all series of notes at a rate of $5 per $1,000 principal amount of notes with the exception of the first series, the 8¼% bonds due 2021, which will be $3.75 per $1,000 face amount of notes.

A late consent fee of $2.50 per $1,000 face amount of notes will be paid on all series of notes.

The early consent fee deadline was 11 a.m. ET on June 23.

The late consent fee will be paid to consent instructions that were received after the early consent fee deadline but on or prior to the voting deadline, which was 11 a.m. ET on June 26.

The consent fee will be paid on July 8.

Credit Suisse (Hong Kong) Ltd. (+852 2101 6541, list.hkdcmsyndicate@credit-suisse.com) and J.P. Morgan Securities plc (+852, 2800 8220, +44 20 7742 5940, 212 834-4533, liability_management_asia@jpmorgan.com) are the solicitation agents.

Morrow Sodali Ltd. (+44 20 7355 0628, +852 2158 8405, 203 609-4910, http://bonds.morrowsodali.com/vedanta, vedanta@investor.morrowsodali.com) is the information and tabulation agent.

Vedanta Resources is a London-listed natural resources company that produces aluminum, copper, zinc, lead, silver, iron ore, oil, gas and commercial energy. Vedanta has operations in India, Zambia, Namibia, South Africa, Ireland, Liberia, Australia and Sri Lanka.

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