New Delhi: Metal and mining major Vedanta Resources will raise up to $1.25 billion through issue of convertible bonds to fund its acquisition and expansion plans besides hiking stakes in its group subsidiaries.
The NRI billionaire Anil Agarwal-led firm has launched the $1 billion convertible bond issue due 2016 and said its size could be further increased by up to $250 million.
“The company intends to use the net proceeds of the offering to support its organic growth pipeline, to increase its ownership interest in its subsidiaries and for general corporate purposes. The net proceeds will also provide the group with additional flexibility to finance acquisitions, the company said in a statement.
The company expects the conversion price of the bonds to be set at a premium of between 35-40% to the volume weighted average price of the ordinary shares on the London Stock Exchange, where Vedanta Resources is listed.
J P Morgan Cazenove is acting as the sole bookrunner of the offering.
Vedanta Resources group entity Sesa Goa last evening announced acquisition of Goa-based V S Dempo & Company’s mining assets in an all-cash deal of Rs1,750 crore. The parent firm will hike its stake in Sesa goa to 55% with a cash outgo of $120 million (Rs569.79 crore) from present 53.1%.