EM-focused Vedanta begins consent solicitation for six bonds

Chicago, June 4 – Vedanta Resources Ltd. (formerly Vedanta Resources plc) and Vedanta Resources Finance II plc started a consent solicitation for six series of bonds, according to a notice.

The company is seeking to make certain amendments to the terms and conditions for each series of bonds.

The proposal

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.

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 is 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 have the ability to complete strategically important capital expenditure even in the middle of a commodity downturn.

Accordingly, the company is seeking to amend the condition on the limitation on borrowings and align the condition regarding negative pledge consistently across each series of bonds.

Series of bonds

The six series of bonds for which the company is seeking consents are the following:

• $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.

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 is 11 a.m. ET on June 23.

The late consent fee will be paid to consent instructions that are received after the early consent fee deadline but on or prior to the voting deadline.

The voting deadline is 11 a.m. ET on June 26 with the meeting of the bondholders scheduled for 9 p.m. ET on June 30.

Beneficial owners of the notes will not be eligible to receive either consent fee if they appoint a proxy other than the information and tabulation agent to attend and vote at the meeting, attend the meeting in person, submit a consent instruction against or abstain from the proposal or in favor of the relevant extraordinary resolution but after the voting deadline or do not vote at all. Also, no consent fee will paid if consent instructions are revoked before the meeting or if they are a sanctions restricted person.

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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