Vedanta Resources' bond restructuring plan faces resistance from investors seeking better terms
Vedanta Resources' (VRL) bond restructuring plan has met with some resistance from investors seeking better terms. The proposed plan suggests making a 50% upfront payment for the $1 billion January 2024 bond, a 15% payment for the August 2024 bond, and a 10% upfront payment for the March 2025 bonds, with the remaining amounts to be restructured.
However, VRL needs the approval of at least two-thirds of the bondholders for this plan to proceed.
Initial feedback from investors in Singapore and Hong Kong reveals discomfort with the proposed restructuring, raising the possibility of opposition from a group of bond investors, two bondholder sources said.
«A group of bondholders could oppose the proposed restructuring, setting the stage for a potential showdown,» a source said.
«VRL needs to achieve a 2/3rd quorum for the bondholder vote, and within that quorum, they need a 2/3rd approval rate to proceed with the restructuring.»
Despite this, bond prices have displayed signs of recovery in recent days, with January 2024 bonds quoted at 91/92, up from a low of 87 the previous week. Similarly, August 24 bonds, previously at a low of 62, were quoted at 65/66 on Friday.
«Vedanta leadership has been meeting and are in discussions with bondholders as part of a regular non-deal roadshow to meet its stakeholders,» a Vedanta Spokesperson said.
Vedanta Resources is actively engaging with investors, with senior executives, including Omar Davis, president of strategy, conducting meetings in London.
The company had previously discussed the potential extension of bonds maturing in 2024 and 2025 during meetings in Hong Kong and Singapore.
As of the end of June 2023, Vedanta Resources Ltd's total aggregated holdco debt amounted to $5.9
