Sep 02, 2024 02:55 PM IST
Vedanta has hired banks to arrange investor calls for five- and seven-year bonds, signaling better prospects after restructuring its dollar bonds.
A unit of Vedanta Resources Ltd.’s is planning to sell its first dollar bond since the group restructured some of its US currency notes earlier this year, signaling improved prospects for the debt-laden miner.
Billionaire Anil Agarwal’s firm has hired banks to arrange calls with global investors from Monday for its five-year and seven-year bonds, a person familiar with the matter said, asking not to be identified as the discussions are private. Vedanta Resources Finance II Plc’s notes can’t be called back for two years and three years, respectively.
The London-based company’s return to the offshore debt market indicates the tide is turning for the conglomerate after it extended due dates on some of its dollar bonds in January, seeking to improve its capital structure and overall financial position. Since the restructuring, its Indian units sold stakes and upstreamed dividends that will aid Vedanta Resources repay $3 billion of debt over the next three years.
While an increase in Indian unit Vedanta Ltd.’s profit can boost liquidity at the parent helping it trim debt, rising metal prices are also aiding its turnaround. The London Metal Exchange LMEX Index has rallied more than 7% so far in 2024, after declining in the previous two years.
The company’s dollar bonds are reflecting the shift. Vedanta Resources Finance II’s notes due in April 2026 have climbed nearly to a par, after touching a low of about 61 cents in January, according to data compiled by Bloomberg. With a 73% gain this year, the notes are one of the best performing junk bonds in the region.
Vedanta Resources continues to cut its debt and improve liquidity. S&P Global Ratings upgraded it in July saying the company had adequate internal funds to meet debt maturities due by end-2025.
The group is also splitting Indian unit Vedanta Ltd. into six listed companies giving investors direct exposure to a business of their choice and in turn improve the value of the group’s component parts.