Vedanta seeks to identify its dollar bondholders as $2 billion debt looms

By Divya Patil and Swansy Afonso

Billionaire Anil Agarwal’s Vedanta Resources Ltd. said it has started an exercise to identify its dollar bondholders, as the miner prepares to repay about $2 billion of notes next year, a record annual amount for the company.  
 

“We have commissioned a bondholder identification exercise for a better understanding of our holders,” Vedanta said in an emailed reply to questions from Bloomberg News. “This will allow us to possibly conduct relevant meetings and interactions with our identified set of bondholders.” 

Vedanta has engaged a corporate advisory firm Morrow Sodali to identify owners of notes that mature in January 2024, August 2024 and March 2025, according to a notice sent last week to bondholders and seen by Bloomberg News, but unconfirmed by the issuer. The firm has given until Oct. 31 for investors to respond to the request, the notice said.

The move comes after S&P Global Ratings earlier this month revised its outlook on Vedanta’s B- speculative-grade rating to negative from stable, citing weakened access to cash flows from its Indian units and challenging external financing conditions. The rating company last month said Vedanta’s refinancing risks will rise if it doesn’t lay out a repayment plan at least six months before the debt maturities. 

The company has a track record of fulfilling all its commitments on time, and will never default, Chairman Agarwal told Bloomberg News last week on the sidelines of the BRICS summit in South Africa. Refinancing is part of a business, Agarwal said, without sharing any concrete details. 

The appointment of a financial adviser heightens concerns the company could turn to some form of bond restructuring, Bloomberg Intelligence analysts Mary Ellen Olson and Sheenu Gupta wrote in a recent note. Vedanta’s notice to bondholders didn’t mention any details on what the appointment would entail.

Some of Vedanta’s dollar bonds are already reflecting signs of distress, typically indicated by prices below 70 cents on the dollar. Notes due in August 2024 were down about 0.2 cent to 65.3 cents on Tuesday, after dropping nearly 5 cents last week in their biggest weekly fall since April.