Vedanta Resources raises $805 mn via bond issue
03/03/2010

The London-listed Vedanta, which is controlled by tycoon Anil Agarwal, has so far raised $4.8 billion through bond issues and ADR sales this year, making it one of the biggest foreign investments in India so far.

Online PR News – 03-March-2010 – – Vedanta Resources said on Tuesday it had raised $805 million (about Rs 3,715 crore) through a convertible bond issue that saw subscription from more than 60 overseas investors, who were unaffected by recent reports of exits by some shareholders, who had expressed concerns over the company’s alleged ethical lapses.

Proceeds from the bond issue, the second this year from Vedanta, will be used partly to refinance existing debt and partly to invest in the alumina project in Orissa, which had sparked the protests from activist organisations leading to the exits by some shareholders.

The London-listed Vedanta, which is controlled by tycoon Anil Agarwal, has so far raised $4.8 billion through bond issues and ADR sales this year, making it one of the biggest foreign investments in India so far.

Vedanta’s bond issue, which opened for subscription early Tuesday, has a coupon rate of 4% and a conversion premium of 37.5%. It closed late on Tuesday evening. Last June, Vedanta had come out with a $1-billion issue to part finance a capacity expansion programme.

Vedanta chairman Anil Agarwal saying that the project has been monitored and cleared by a Supreme Court-appointed panel.

“The bond issue size of $805 million could be increased by $75 million by way of an over-allotment option granted to the joint bookrunners allowing them to subscribe for up to an additional $75 million of bonds by March 26, 2010,” Vedanta said in its emailed statement from London. JP Morgan Cazenove and Morgan Stanley are the so-called book runners or bankers, who have to find investors willing to put their money in the issue. Although Vedanta said it would give priority to existing shareholders in the allocation of the bonds, it added that Volcan Investments, the majority shareholder of the company, which is owned by the its owners, will not participate in the transaction.

During the quarter ended December 31, 2009 (Q3), the company achieved its highest-ever zinc and lead-mined metal production of 200,000 tonne.

During the same period, refined zinc and lead metal production was stable at 169,000 tonne, while silver production was up 48% at 1.38 million ounces.

Source: Economic Times