Vedanta may soon launch debt recast plan, request for proposals invited from banks
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UK-listed Vedanta Resources and its Indian arm Vedanta group may soon launch a debt refinancing exercise, The Economic Times reported, citing sources in-the-know.
The two companies have already invited request for proposals from banks, including Standard Chartered, Barclays, Citigroup, Bank of America-Merrill Lynch, Deutsche Bank, and Goldman Sachs.
As per the report, the parent, Vedanta Resources, and its subsidiary companies, including India's Sesa Sterlite, have a combined debt of USD 16.2bn. It was also noted that the group is aiming to reduce its gearing from 40.8% to 25%, with the debt refinancing plan expected to proceed in several phases.
A significant portion of the debt that will be refinanced is in the parent Vedanta Resources and its power and aluminum business, the item noted. The paper also said an estimated USD 350m in loans is now in advanced stages for being refinanced. It was also reported the group will have another USD 2bn in convertibles and bonds mature in June-July of next year.
Unnamed investment banking sources were quoted as saying that the debt refinance may be a precursor to a merger between Vedanta India and Cairn India. One investment banking source further added that a debt restructuring is attractive for Vedanta at the current LIBOR rates.
In regards to a proposal by Vedanta to acquire the Government of India's residual stakes in Balco and Hindustan Zinc, one source was quoted as saying that it was still unclear at this stage whether the Indian government would approve the sale proposal.
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Source The Economic Times