- Strategy & Operations
- 2 min read
Vedanta Resources confident of bond recast plan success
An ad hoc group holding two guaranteed bonds of Vedanta Resources (VRL) has advised investors to reject the proposed bond restructuring outlined in the consent solicitation released on December 13. The ad hoc group includes holders of $1 billion 13.875% bonds due in January 2024, $1.2 billion 8.95% bonds due in March 2025 and two other bonds.
Vedanta Resources said it is confident of restructuring the bonds that are coming up for redemption as it arrived at the formula after consultations with several bondholders. It said the advice by an ad hoc group holding guaranteed bonds to reject the proposed bond restructuring may not succeed.
An ad hoc group holding two guaranteed bonds of Vedanta Resources (VRL) has advised investors to reject the proposed bond restructuring outlined in the consent solicitation released on December 13. The ad hoc group includes holders of $1 billion 13.875% bonds due in January 2024, $1.2 billion 8.95% bonds due in March 2025 and two other bonds.
"The company is highly encouraged with the responses it has received, both privately and publicly, to its offer and is highly confident of a successful outcome to the consent solicitation exercise," said a Vedanta spokesperson.
The spokesperson added that the company has spoken to, and engaged with, many bondholders across all tranches before arriving at the final terms of the proposal. "Vedanta believes that the proposal put forward to bondholders is the best available for all stakeholders in the company and provides both a strong offer to bondholders, whilst giving the company the required flexibility to achieve its de-leveraging targets in a time-bound manner," the spokesperson said.
The ad hoc group consists of Avenue Capital and a few other funds which may not be enough to block the liability management exercise (LME) proposal, said a source.
"The LME proposals fail to incorporate any feedback from the ad hoc group. Therefore, in the assessment of the ad hoc group, the LME proposals do not represent the best terms possible in respect of the guaranteed notes," the group said.
VRL needs to achieve a two-thirds quorum for the bondholder vote, and within that, they need two-thirds approval to proceed with the restructuring.
As part of the restructuring, Vedanta has proposed part cash payment for each bond series and proposed amendments for the April 2026 bonds. For the January 2024 bonds, bondholders are offered a 53% cash payment and a 2% consent fee, maturing in January 2027. The August 2024 bonds receive a 6% upfront payment, and March 2025 bonds receive a 16% upfront payment, each with early and late consent fees.
An ad hoc group holding two guaranteed bonds of Vedanta Resources (VRL) has advised investors to reject the proposed bond restructuring outlined in the consent solicitation released on December 13. The ad hoc group includes holders of $1 billion 13.875% bonds due in January 2024, $1.2 billion 8.95% bonds due in March 2025 and two other bonds.
"The company is highly encouraged with the responses it has received, both privately and publicly, to its offer and is highly confident of a successful outcome to the consent solicitation exercise," said a Vedanta spokesperson.
The spokesperson added that the company has spoken to, and engaged with, many bondholders across all tranches before arriving at the final terms of the proposal. "Vedanta believes that the proposal put forward to bondholders is the best available for all stakeholders in the company and provides both a strong offer to bondholders, whilst giving the company the required flexibility to achieve its de-leveraging targets in a time-bound manner," the spokesperson said.
The ad hoc group consists of Avenue Capital and a few other funds which may not be enough to block the liability management exercise (LME) proposal, said a source.
"The LME proposals fail to incorporate any feedback from the ad hoc group. Therefore, in the assessment of the ad hoc group, the LME proposals do not represent the best terms possible in respect of the guaranteed notes," the group said.
VRL needs to achieve a two-thirds quorum for the bondholder vote, and within that, they need two-thirds approval to proceed with the restructuring.
As part of the restructuring, Vedanta has proposed part cash payment for each bond series and proposed amendments for the April 2026 bonds. For the January 2024 bonds, bondholders are offered a 53% cash payment and a 2% consent fee, maturing in January 2027. The August 2024 bonds receive a 6% upfront payment, and March 2025 bonds receive a 16% upfront payment, each with early and late consent fees.
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