Vedanta Resources in talks for $500-million loan to meet repayment obligation: Report

livemint.com:

Vedanta Resources (VRL) has begun negotiations with Cerberus Capital Management and Varde Partners to secure a $500-million loan. This loan is part of the company's efforts to fulfil a $1-billion repayment obligation due in January, The Economic Times reported on November 02.

The report said that the company is also in talks with Standard Chartered Bank and other credit funds for the remaining $500 million-$600 million. A source told ET that "the new loan is expected to be raised at a significantly higher interest rate, around 17–18%, compared with prepayments from Oaktree and Trafigura, which were below 13%." "This new financing would be utilised for the prepayment of 55% of the 13.875% bonds due in 2024, 5% of the 6.125% bonds maturing in August 2024, and 20% of the 8.95% bonds set to mature in March 2025," ET further quoted the source as saying.

Spokespersons for Cerberus, Varde and Vedanta did not respond to ET requests for comment. The report stated that Vedanta initially proposed a loan size of $1.2 billion, but private credit funds and lenders have lowered it to a $1.1-billion deal.

According to the report, discussions between Vedanta Resources and its bondholders are ongoing regarding the final restructuring terms in a liability management exercise. Certain bondholders have indicated their intent to proceed with an upfront payment of $550 million by January 2024, along with an additional $100 million in consent fees, amounting to 65% of the bond's total value, said the report.

ET further reported, citing the source, that the proposed loan is expected to be backed by brand fee receivables. Vedanta has offered upfront payments of 55% for January 2024 bonds, 5% for August 2020 bonds, and 20% for March 2025 bonds.