Vedanta terminates consent solicitation based on investor responses

Chicago, July 16 – EM-focused Vedanta Resources Ltd., Vedanta Resources Finance II plc, Twin Star Holdings Ltd. and Welter Trading Ltd. have terminated a consent solicitation for two series of notes, according to a document.

After considering the responses from investors since beginning the solicitation, the company has decided that it may not be in its best interest to seek such consent solicitations at this stage.

The company stated that the consent solicitations were “a proactive initiative by the company to create flexibility for the purpose of refinancing existing indebtedness of the company and/or acquiring further equity shares by the subsidiary guarantors, if any, in accordance with applicable laws.”

The company asserts that the consent solicitations were credit positive for all stakeholders, were in continuation of the various initiatives the company has undertaken in recent years to simplify the Vedanta Group capital structure and to streamline the servicing of the group’s financing obligations and to strengthen a range of important credit metrics.

As previously reported, the issuers were soliciting consents for the $1 billion 13 7/8% bonds due 2024 (Cusips: V9667MAA0, 92243XAD3) and the $1.2 billion of 8.95% bonds due 2025 (Cusips: G9T27HAD6, 92243XAE1), both issued by Finance II and guaranteed by Vedanta Resources.

The central reason for the consent solicitation was that Vedanta was seeking to increase the subsidiary guarantors’ headroom under the indebtedness covenant in the terms and conditions for each series of bonds to enable the subsidiary guarantors to raise more debt for the purpose of proactive refinancing of existing debt of Vedanta and/or acquiring more equity shares of the subsidiary guarantors.

In terms of acquiring more equity shares, the company was aiming to streamline the structure of the Vedanta Group and has been acquiring equity shares in the subsidiary companies. To facilitate any acquisitions, the company would need further debt financing.

An early consent fee of $2.50 per $1,000 note was to be paid to early consenting noteholders who voted in favor of the extraordinary resolution and a late consent fee of $1.25 per note would be paid to late consent noteholders.

The early consent fee deadline was 11 a.m. ET on July 21.

The voting deadline was 11 a.m. ET on July 26.

The bondholder meetings were to be held starting at 9 p.m. ET on July 28.

Barclays (+44 20 3134 8515, +852 2903 3266, eu.lm@barclays.com), Deutsche Bank AG, Singapore Branch (+852 2203 8652, +65 6423 5342, asiasyn@list.db.com), J.P. Morgan Securities plc (+44 20 7742 5940, +852 2800 8220, 212 834-4533, liability_management_asia@jpmorgan.com) and Standard Chartered Bank (+44 20 7885 5739, +852 3983 8658, +65 6557 8286, liability_management@sc.com) were the solicitation agents.

Morrow Sodali Ltd. was the information and tabulation agent (+44 20 8089 3287, +852 2319 4130, 203 609-4910, vedanta@investor.morrowsodali.com, https://bonds.morrowsodali.com/vedanta).

Vedanta is a diversified metals and mining, oil and gas and power generation company. The company’s business is principally located in India but also has operations in Zambia, Namibia, South Africa, the United Arab Emirates, Japan, South Korea and Taiwan.

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