Vedanta Resources, the mining and metals company led by Anil Agarwal, has launched a $3.6 billion (approximately ₹34,000 crore) bond buyback programme as part of its global debt management strategy. The initiative, targeting bonds listed on the London Stock Exchange, is being viewed as the first phase of the company’s broader $5.4 billion refinancing plan.
The move comes ahead of the proposed listing of four separate Vedanta-related companies in the Indian stock market on June 15. Earlier, the company’s demerger plan came into effect on May 1, under which its businesses were divided into separate entities.
According to the company, the objective of the bond buyback offer is to restructure existing debt, reduce financing costs and extend the maturity profile of its liabilities. Reports indicate that the buyback offer will remain open until June 23. During this period, the company is also engaged in discussions with global investors in London, New York and Boston regarding new bond issuances and debt refinancing.
The company believes that the strategy could reduce its borrowing costs by around 3%, strengthening its long-term financial stability.
According to available information, Vedanta may be required to make up to $300 million in additional payments during the buyback process, as some of its outstanding bonds are trading above their face value. However, the company maintains that the short-term cost could prove beneficial over the longer term by creating a more stable and manageable debt structure.
Experts noted that investors currently benefiting from capital gains at prevailing market prices may be reluctant to sell their bonds back, given that they are trading at a premium.
Several major international banks are supporting the refinancing effort, including Citigroup, JPMorgan Chase and Barclays. With assistance from these financial institutions, Vedanta is working on debt restructuring and evaluating new funding options.
Analysts said that improvements in commodity prices and upgrades in credit ratings in recent months have helped ease the refinancing process for Vedanta. The company has already partially repaid approximately $1.8 billion of loans, reducing pressure on its balance sheet to some extent.
Vedanta Group recently completed the demerger process for four new companies as part of its business restructuring exercise. Preparations for the listing of these entities on Indian stock exchanges are now in the final stage.
