NOT FOR DISTRIBUTION IN OR TO THE U.S., CANADA, AUSTRALIA, OR JAPAN, OR IN ANY OTHER JURISDICTION IN WHICH SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW
2 March 2010
Convertible Bond Offering
Vedanta Resources plc (the "Group", the "Company" or "Vedanta") today announces the launch of an offering of approximately US$775 million of Convertible Bonds due 2017 (the "Bonds").
The Company intends to use the net proceeds of the offering to refinance debt redemptions and for general corporate purposes. Priority in allocation of the Bonds will be given to existing shareholders of the Company. Volcan Investments Limited, the majority shareholder of the Company, has indicated it will not participate in the transaction.
The Bonds will be issued at par by the Company's wholly-owned subsidiary Vedanta Resources Jersey II Limited (the "Issuer") and will be guaranteed by the Company. The Bonds are expected to have a coupon of 3.50% to 4.00% payable semi-annually in arrear and will be convertible into fully paid ordinary shares with a nominal amount of US$0.10 of the Company ("Ordinary Shares"). The conversion price is expected to be set at a premium of between 35% to 40% to the volume weighted average price of the Ordinary Shares on the London Stock Exchange between launch and pricing. The announced size of US$775 million may be increased by up to US$75 million by way of an over-allotment option granted to the joint bookrunners allowing them to subscribe for up to an additional US$75 million of Bonds by 26 March 2010.
Vedanta has recently redeemed US$1,146 million of bond debt from existing cash resources, including US$546 million of its US$725 million 4.60% convertible bonds due 2026 and US$600 million of its 6.625% bonds due 2010. The redemption of US$546 million of its US$725 million 4.60% convertible bonds due 2026 resulted in a reduction of 21.08 million of the possible non voting global depositary receipts representing Ordinary Shares that could have been issued pursuant to the terms of such bonds. Based on the announced issue size of US$775 million, the Bonds to be issued are expected to represent approximately 14.56 million Ordinary Shares or 5.245% of the current total number of issued and outstanding Ordinary Shares of the Company.
For all Ordinary Shares issued under the offering representing more than 5.00% of the current issued and outstanding Ordinary Shares, Shareholder approval will be sought by the Company at the next General Meeting to facilitate full conversion in Ordinary Shares. Until the Company receives this approval, conversions will be partially cash settled.
Settlement is expected to take place on or about 30 March 2010 (the "Settlement Date"). If not converted or previously redeemed the Bonds will be redeemed at par 7 years from the Settlement Date. Investors have the option to have the Bonds redeemed at par 3 (and 30 days) and 5 years from the Settlement Date or otherwise for a certain period following a change of control of the Company. The Company will have the option to call the Bonds from approximately 3 years after the Settlement Date until maturity, in the event that the volume weighted average price of the Ordinary Shares on the London Stock Exchange exceeds 130% of the conversion price over a certain period. In addition, the Company has the right to redeem the Bonds if at any time the aggregate principal amount of the Bonds outstanding is equal to or less than 15% of the aggregate principal amount of the Bonds initially issued. It is intended that an application will be made for the Bonds to be listed on the Official List and admitted to trading on the Professional Securities Market (PSM) of the London Stock Exchange.
J.P. Morgan Cazenove and Morgan Stanley are acting as joint bookrunners for the offering. J.P. Morgan Cazenove is a marketing name for the UK investment banking business of J.P. Morgan Securities Ltd.
For further information, please contact:
Vice President- Investor Relations
Vedanta Resources plc
Tel: +44 20 7659 4732 / +91 22 6646 1531
J.P. Morgan Cazenove
Tel: +44 20 7588 2828
Tel: +44 20 7425 8000
Tel: +44 20 7251 3801
About Vedanta Resources plc
Vedanta is a London listed FTSE 100 diversified metals and mining major. The Group produces aluminium, copper, zinc, lead, iron ore and commercial energy. Vedanta has operations in India, Zambia and Australia and a strong organic growth pipeline of projects. With an empowered talent pool of 30,000 employees globally, Vedanta places strong emphasis on partnering with all its stakeholders based on the core values of entrepreneurship, excellence, trust, inclusiveness and growth. For more information visit www.vedantaresources.com
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THE BOOKRUNNERS AND THEIR RESPECTIVE SUBSIDIARIES AND AFFILIATES MAY PERFORM SERVICES FOR, OR SOLICIT BUSINESS FROM, THE ISSUER, THE COMPANY OR MEMBERS OF THE ISSUER'S GROUP OR THE COMPANY'S GROUP, MAY MAKE MARKETS IN THE SECURITIES OF THE ISSUER, THE COMPANY OR MEMBERS OF THE ISSUER'S GROUP OR THE COMPANY'S GROUP AND/OR HAVE A POSITION OR EFFECT TRANSACTIONS IN SUCH SECURITIES.
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EEA SELLING RESTRICTION AND DEEMED INVESTOR REPRESENTATION
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