Vedanta Resources' bonds rebound after parent restructures its debt
Vedanta Resources' (VRL) bond prices rebounded from distressed levels to standard ranges after the London-based holding company, which owns mining, metals and resources assets in India, restructured the debt earlier this month. VRL's 6.125% bond worth $900 million and maturing in August this year, increased from 65 cents to 77 cents post-restructuring.
This month, the Anil Agarwal-promoted company got investor approval to recast the debt ahead of a redemption deadline, with more than 97% of VRL bondholders approving the restructuring, particularly for bonds maturing in the next 18 months.
VRL was otherwise required to repay $1 billion in debt on January 21, $900 million in August, and $1.25 billion in March 2025.
By offering a $2 consent fee, Vedanta Resources secured strong approval from bondholders for the restructuring of four series of bonds worth $3.15 billion.
«Most investors are also expected to receive an early consent fee of $2, taking the effective price to 79 cents for the August bond as the bonds are getting restructured, a big movement from 65 cents pre restructuring,» said a debt capital market source.
VRL's $1.25 billion 8.75% bond due in March 2025 has gone up from 72 cents to 80-81 cents.
«The successful debt restructuring at the Vedanta parent removes a major overhang on the Vedanta stock,» said Ashish Kejriwal, director- research, at Nuvama.
The company's shares rose 2.51% to ₹267 on the BSE on Tuesday. Nuvama issued a buy call, raising the target price to ₹362 per share.
VRL agreed to an upfront payment of $779 million and a consent fee of $68 million, pushing maturities to FY27 and beyond.
