Vedanta to issue Rs.2,000 crore-worth non-convertible debentures

Anil Agarwal-led natural resources firm Vedanta Ltd. on Monday said it would issue non-convertible debentures (NCDs) worth Rs.2,000 crore towards refinancing debt.

"Vedanta Ltd. is, subject to favourable market conditions, in the process of issuing secured, rated, non-cumulative, redeemable NCDs of Rs.10 lakh each up to Rs.2,000 crore on a private placement basis," the company said in a stock exchange filing.

"The issuance of NCDs is part of the overall 'debt refinancing' of the company to substitute the short term liabilities/borrowings/debt and/or to retire higher cost debt'," the filing added.

"This issue is part of the overall approval of Rs.8,000 crore by the board of directors and by the shareholders in the 50th AGM of the company held on July 11, 2015, permitting issuances in one or more series/tranches on private placement basis during a period of 12 months," the company said.

Out of Vedanta's total debt of Rs.79,530 crore, the Indian currency debt is Rs.38,616 crore, while the balance debt of Rs.40,914 crore is held in US dollars.

The mining major said that for the first quarter ended June, its gross debt increased by Rs.1,778 crore to Rs.79,530 crore on account of funding project payments and temporary working capital requirements.

Its gross debt is composed of long-term loans of Rs.64,825 crore, and Rs.14,705 crore for short-term working capital.

In May, Vedanta's parent company London-based Vedanta Resources had said it's eyeing likely low interest rates in India to refinance its short-term loans of up to $1.6 billion (about Rs 10,200 crore) with long-term options this fiscal.

The mineral and mining major has loans worth $2.5 billion maturing in 2015-16, of which $2.1 billion is with the subsidiaries and the remaining $0.4 billion the group firm Vedanta Resources.

In June, Vedanta announced the merger of two of its group companies -- the oil and gas exploration major Cairn India with Vedanta Ltd. Cairn shareholders will get one equity and one redeemable preference share of Vedanta.

The transaction is intended to be completed by the first quarter of 2016, the group said.

In a stock exchange filing at the time, it said: "Approximately 752 million each of equity shares and redeemable preference shares will be issued to the minority shareholders of Cairn India by Vedanta Limited pursuant to the merger."

Vedanta Limited itself was created with the merger of Sesa Goa, Sterlite and Vedanta Aluminium.

Vedanta took majority control of Cairn India for $8.67 billion in 2011 and holds 59.9 percent in the latter through its various units.

Merging Cairn India with itself would provide Vedanta access to the oil explorer's cash and help reduce its debt burden.

Also in June, Vedanta hiked stake in its oil and gas exploration subsidiary Cairn India by nearly five percent for $315 million from a wholly-owned subsidiary -- Twinstar Mauritius Holdings (TSMHL).

The Vedanta stock closed on Monday at Rs.105.25 a share, down 1.95 points, or 1.82 percent, over its previous close on the Bombay Stock Exchange.