Anil Agarwal-led Vedanta group is looking to raise $8 billion via debt and equity as it prepares to make a bid to acquire Bharat Petroleum Corporation (BPCL).
Vedanta had put forward an ‘exploratory’ preliminary expression of interest for buying a 52.98 per cent stake in BPCL. “Vedanta’s EoI (Expression of Interest) for BPCL is to evaluate potential synergies with our existing oil and gas business. The EoI is at a preliminary stage and exploratory in nature,” the company said.
Analysts see Vedanta’s interest in BPCL stems from its $8.67 billion worth acquisition of oil producer Cairn India around 10 years back. Cairn India produces oil from oil fields in Rajasthan. The oil is used in refineries including those operated by BPCL to produce petrol, diesel, and other fuels. The acquisition of BPCL is expected to provide a boost to the company’s expansion plans in India.
Buying a 75 per cent stake in BPCL (53 per cent from the government and 22 per cent through an open offer) would cost Vedanta Rs 64,200-97,600 crore depending on the price (Rs 395 to 600 per share).
Bloomberg reported on 10 December that Vedanta Resources secured much-needed funds by selling $1 billion of notes at one of the highest yields for a dollar bond in Asia this year. It priced the January 2024 bond on Wednesday at a yield of 13.875 per cent. Vedanta Resources plans to use the money to fund a buyback offer for $670 million of notes maturing in June 2021.