Vedanta in US$775m bond offering
- Publishing Date
- 02 Mar 2010 2:00pm GMT
- Author
- Mining Journal
Vedanta Resources plc has launched a US$775 million convertible bond to refinance its debt and for general corporate purchases.
Existing shareholders will be given priority in the offering, although the company says that its largest shareholder, Vulcan Investments Ltd, will not be participating in the transaction.
The company’s shares were down as much as 6% following the announcement. The price later recovered to £25.36/share, down 4% by midday in London.
A coupon of about 3.5-4% is expected, and the conversion price will be 35-40% above the average price of the share between launch and pricing. There is also an over-allotment option for an additional US$75 million.
The company says it recently redeemed US$1.15 billion of bond debt from existing cash, including US$546 million of its US$725 million convertible bond (which has a 4.6% coupon). That deal resulted in a reduction in potential shares of 21.08 million. The new issue is expected to represent about 14.56 million shares, or 5.2% of the current outstanding shares in the company.
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