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| Vedanta raises $1.25 billion |
| BS Reporter / Mumbai Jun 13, 2009, 00:11 IST |
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The London-listed Vedanta Resources has raised $1.25 billion (approximately Rs 5,925 crore) through issue of convertible bonds, primarily for funding its aluminium project at Jharsuguda in Orissa and to also increase stakes in group companies.
The bonds, which will mature in 2016, have a coupon of 5.5 per cent payable semi-annually in arrears and will be convertible into fully-paid ordinary shares. It will have a maturity of seven years with a five-year put option. The conversion price is $36.48, representing a premium of 35 per cent to the volume weighted average price (VWAP) of the shares on the London Stock Exchange today and represents a 46 per cent premium to the 30-day VWAP, the company said in a statement.
The net proceeds will provide us with an additional financial flexibility to continue our strategy of investing in our organic growth projects, consolidating our minorities and making selective acquisitions, said Vedanta Resources Chairman Anil Agarwal.
Vedanta also said it would subscribe to the preferential share offer being made by its subsidiary Sesa Goa. After the issue, the promoter’s stake in Sesa Goa will increase to 55 per cent from 53.1 per cent with a cash outgo of Rs 569.79 crore.
The proposed increase in stake comes a day after Vedanta Group firm Sesa Goa announced acquisition of Dempo’s mining assets in an all-cash deal of Rs 1,750 crore. Under the preferential share offer, Vedanta Resources will subscribe to an additional 33,274,000 equity shares of Re 1 face value each, a company statement said.
The group is also keen to raise their stake in Bharat Aluminium Company (Balco) and Hindustan Zinc (HZL) by acquiring the government’s holdings in the companies. Moreover, it’s subsidiary Sterlite is in the race for acquiring US-based bankrupt copper miner Asarco.
As part of its expansion plan in India, Vedanta Resources plans to pump in Rs 70,000 crore by 2011-12 for its aluminium, zinc, iron ore and copper projects. Of the proposed investment, it has already invested about 50 per cent.
“We had a total $30-billion capex plan. As of now, we have spent around $10 billion. In a move to conserve capital, the company has decided to cut its remaining investments by $5 billion. We have about $7 billion cash in our balance sheet and the remaining would be generated through internal accruals,” Vedanta Resources Chairman Anil Agarwal had told Business Standard earlier this year.
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