InvestorQ : Why has Vedanta raised $400 million from Oaktree Capital?
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Why has Vedanta raised $400 million from Oaktree Capital?

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7 months ago
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The fund raising of $400 million by Vedanta from Oaktree was purely to meet its liquidity needs. All these notes issued to Oaktree are partly secured. Oaktree is one of the largest stressed asset funds in the world and it may be recollected that they are among the last round shortlisted bidders to purchase the assets of Dewan Housing Finance Ltd.

Under the Subscription Agreement signed between Vedanta and Oaktree, Vedanta will issue 400 million notes of nominal value of $1 each in favour of a unit of Oaktree. As a security, the Vedanta promoter will create a pledge on entire equity. There are also certain restrictive covenants in the subscription agreement on the promoter group selling, leasing assets.

Vedanta has been raising money quite aggressively in the market. In the first week of Dec-20, Vedanta had sold $1 billion of securities at one of the highest yields for a dollar bond in Asia. At that point of time, the money was supposed to be used to finance the buyback offer for $670 million of notes that are due to mature in June 2021.

Vedanta Resources has been getting deep into debt and it had counted on the delisting of Vedanta Ltd to repay its dues. However, the delisting did not materialize. Over the last few years, Vedanta has been trying hard to strip many of its India assets which are cash cows so as to repay its global debt, but that has not happened. Vedanta is now bidding for BPCL.

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