The Indian mining company inked a five-year deal with JPMorgan Chase & Co. and Oaktree, according to people familiar with the matter, who asked not to be named because the matter is private.
Investors have a close eye on the group’s debt load, as surging interest rates intensify pressure on junk-rated borrowers. The transaction takes place just days before Vedanta Resources Ltd. must pay back a $500 million bond.
With roughly $2 billion of US-currency bonds also coming due in 2024, the group backed by one of India’s richest men is on a quest for cash after its via the sale of a zinc mining unit to Hindustan Zinc Ltd. hit a roadblock.
Investors’ lingering concerns about the finances of Agarwal’s group are reflected in its bond prices.
Bloomberg-compiled data show the Vedanta Resources Ltd. bonds due in August 2024 and April 2026 are trading below 70 cents a dollar, a level that’s generally considered distressed. The May 2023 bond, however, is trading just below par.
London-based parent Vedanta Resources has relied on hefty dividends from its Indian units, with Vedanta Ltd. making 377 billion rupees ($4.6 billion) worth of payouts last fiscal year.
The Mumbai-based subsidiary this week announced its first payout for the new fiscal year in the form of a 68.8 billion rupee dividend.
A spokesperson for Vedanta didn’t comment when contacted by Bloomberg. JPMorgan didn’t respond to an emailed request for comment, while Oaktree declined to comment.
–With assistance from Swansy Afonso, Silas Brown, Denise Wee and Jessica Zhou.
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