Vedanta to raise around $1.5 billion in bonds for Cairn deal

20 May 2011

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London-listed miner Vedanta Resources is looking to raise  around $1.5 billion through a private bond offering to help pay for its planned $9.6 billion acquisition of oil and gas firm Cairn India.

The company would become a fully-fledged diversified miner with its acquisition of a slice of India's oil reserves. The company said the proceeds from the dollar denominated bond would be used to repay a bridge loan, as also part of the purchase price, and fees and expenses pertaining to the long-delayed Cairn deal.

According to the miner, in the event the deal did not go ahead, it would use the cash to "fund capital expenditure, repay debt and for other general corporate purposes".

UK group Cairn agreed in August 2010 to sell a majority stake in Cairn India to Vedanta, however, the deal was delayed following a dispute over royalty payments.

A panel of ministers would meet on 27 May  to consider the sale. Yesterday Cairn and Vedanta extended a 20 May deadline for the troubled deal.

Vedanta will start a series of investor meetings on Monday for marketing the bond across Asia, Europe and the US and has hired Barclays Capital, Citigroup, Credit Suisse, Royal Bank of Scotland and Standard Chartered Bank as joint global coordinators.

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