Vedanta seeks RBI’s approval to raise $1-billion bonds from foreign banks

Vedanta has reportedly sought approval from the Reserve Bank of India (RBI) to give guarantees for a $1-billion loan that it plans to raise via one of Vedanta’s foreign subsidiaries. Anil Agarwal-led Vedanta is in talks with JP Morgan, Barclays, Standard Chartered and Deutsche Bank for the said loan, according to a report in a leading Indian business daily.  

The loan is to be raised through THL Zinc Ventures, a wholly-owned subsidiary of Vedanta that is based in Mauritius. The amount will then be upstreamed to the group’s London-based holding company Vedanta Resources (VRL) in the form of dividend payout, the report has said, citing unnamed sources.  

The global lenders in talks with Vedanta have supposedly sought 800 basis points over the Secured Overnight Financing Rate (SOFR). SOFR is the benchmark interest rate at which banks lend to each other in the global interbank market. The Anil Agarwal-led group has been negotiating for loan at a lower rate, the report has added. The current SOFR is 4.55 per cent.  

VRL is attempting to raise funds so that it can meet its upcoming debt obligations. VRL reportedly has $400 million of bonds due in April in addition to another $500 million dollar bonds due in May. Other than these immediate needs, Vedanta has another $1 billion in bonds maturing in January 2024. 

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