Vedanta Resources, the London-listed metals and mining major, has finalised a consortium of banks that will fund up to $6 billion of debt needed to finance its acquisition of Cairn India. Standard Chartered Bank is the lead arranger for the loan and will be funding up to $2 billion as part of the consortium.
The loans will be a combination of short-term and long-term financing. Vedanta Resources recently surprised the energy industry when it announced plans to enter the oil exploration sector through the acquisition of a controlling stake in Cairn India for about $10 billion. Vedanta is likely to raise bridge loans of up to $2.5 billion which will have a tenure of 12-18 months. The remaining $3.5 billion will be long-term loans of tenure 5-7 years.
