Sesa Sterlite plans to issue preferential warrants worth $2 billion to Vedanta: Sources

Anil Agarwal’s Sesa Sterlite plans to issue preferential warrants worth about $2 billion to parent company, Vedanta Resources, two independent sources with direct knowledge said.

Vedanta Resources holds close to 60% stake in Sesa Sterlite after buying some shares in the last few days.

Vedanta is planning a preferential warrant issue to not only take its stake in Sesa Sterlite closer to 75% before the much-anticipatd economic revival takes place in India, but also to ease Sesa’s debt woes.

Sesa Sterlite closed FY14 with a net debt of $4.7 billion and is currently in need of funds to reduce its debt pile.

Experts point out that while the warrant issuance provides a conversion time of 18 months, Vedanta will still have to pay 25% of the amount upfront as per the regulations, which will not be easy for the London-listed company.

Vedanta Group declined to offer any response to an e-mail query sent by ET NOW on the issue.