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Vedanta chip unit places USD 300m in two-year 10% INR NCDs with private credit funds
Private Credit
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Vedanta Limited’s (VDL) chipmaking unit, Vedanta Semiconductors, privately placed INR 25bn (USD 299.3m at today’s exchange rate) in non-convertible debentures (NCDs) with private credit funds Tuesday (14 May), according to a source with direct knowledge and documents available on the National Securities Depository Limited (NSDL) website.

The NCDs, which carry a two-year tenor, were placed with a group of private credit funds including Varde Partners, Davidson Kempner, Broad Peak Investment Advisors, and BlackRock, the source said.

VDL, Varde Partners, Davidson Kempner, Broad Peak Investment Advisors, and BlackRock did not respond to requests for comment by press time. 

The NCDs carry a 10% coupon and were issued at a price of INR 94,900 (USD 1,136) per debenture carrying an INR 100,000 (USD 1,197) face value, NSDL information showed. The NCDs are secured by a pledge over VDL’s shares in Hindustan Zinc to cover 0.75x of the entire facility amount, a pledge over 100% of VDL’s shares in Vedanta Semiconductors, a first ranking pari passu charge over certain VDL's movable fixed assets relating to its aluminum, copper, and iron ore businesses, as well as a first ranking exclusive charge over all the movable assets, bank accounts, and current assets of Vedanta Semiconductors, NSDL information showed. 

The NCDs carry an all-in price of 13.3%, according to a 9 May resolution passed by Vedanta Semiconductor’s board of directors, documents available on the website of the Ministry of Corporate Affairs showed. 

REDD first reported on 25 April that private credit funds were targeting returns of 12% – 13% in USD terms from the proposed loan to Vedanta Semiconductors and would also obtain a foreign exchange indemnity from VDL’s holding company, London-listed Vedanta Resources (VRL).

This followed REDD’s 24 April report that VDL’s board of directors had approved obtaining an intercompany loan of INR 25bn (USD 299.3m) from Vedanta Semiconductors. VDL's board approved creating a first-ranking pari passu charge over movable fixed assets in VDL’s aluminum, copper, and iron ore division, and a first-ranking exclusive pledge over 100% of VDL’s shareholding in Vedanta Semiconductors to back an INR 25bn (USD 299.3m) proposed NCD issuance by Vedanta Semiconductors, as also reported.

By Poonam Bansal and Neeraja Balakrishnan

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