Luthra acts for lenders in 4 billion Vedanta Aluminium financing
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Luthra acts for lenders in 4 billion Vedanta Aluminium financing

Bar & Bench

Sources indicate that Luthra & Luthra Law Offices, led by Mumbai Partner Vijaya Rao, have acted for the lenders in the mammoth Rs. 19,200 crore ($4.1 billion) part financing of Vedanta Aluminium’s integrated aluminium project in Orissa. The current phase of debt financing, amounting to Rs. 10,000 crore ($2.1 billion) is subscribed to by a 25-bank local lending group led by the State Bank of India.

Sources indicate that Luthra & Luthra Law Offices, led by Mumbai Partner Vijaya Rao, have acted for the lenders in the mammoth Rs. 19,200 crore ($4.1 billion) part financing of Vedanta Aluminium’s integrated aluminium project in Orissa. State Bank of India, the country’s biggest lender, is leading a consortium of banks in partially financing the Rs. 31,400 crore ($6.8 billion) project.

The project is being financed in three phases- a consortium of lenders comprising Bank of Maharashtra, Corporation Bank, ICICI Bank, Indian Bank and Life Insurance Corporation of India have already financed about Rs. 1,900 crores ($415 million), comprising roughly 6 percent of the syndicated debt. The total syndicated debt is approximately Rs. 19,200 crores, while the equity raised for the expansion amounts to Rs. 12,400 crores ($2.7 billion).

The current phase of debt financing, amounting to Rs. 10,000 crore ($2.1 billion), along with a green-shoe option of Rs. 7,300 crore ($1.5 billion), is subscribed to by a 25-bank local lending group led by the State Bank of India.

Vedanta Aluminium, whose parent company Vedanta Resources is reportedly not standing guarantor for the loan, is in the process of developing a fully integrated aluminium project comprising bauxite mining, an alumina refinery, captive power plants and an aluminium smelter in Lanjigarh. The project will augment the capacity of its alumina refinery in Lanjigarh  to 5 million tonnes per annum (MTPA) from the present 1.4 MTPA, while the capacity of the Jharsuguda aluminium smelter will increase to 1.75 MTPA, from close to 0.7 MTPA.

Sources suggest that Khaitan & Co. are advising Vedanta in this transaction. However, Mumbai Partner Rabindra Jhunjhunwala declined to give any confirmation. Khaitan have previously acted for Vedanta in their acquisition of Sesa Goa, India’s largest private producer/exporter of iron ore. Luthra Partner Vijaya Rao declined to divulge any details on the ongoing transaction.

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