GLAS Agency Creates Encumbrance Over Vedanta Limited Shares for Senior Bond Issue
GLAS Agency (Hong Kong) Limited has established an encumbrance over the equity shares of several prominent listed Indian entities, including Vedanta Limited, Vedanta Power Limited, Vedanta Oil and Gas Limited, Vedanta Iron and Steel Limited, and Vedanta Aluminium Metal Limited. This action is being taken in its capacity as security trustee for holders of bonds issued by Vedanta Resources Finance II plc, a subsidiary of Vedanta Resources Limited.The encumbrance relates to equity shares held by Twin Star Holdings Limited, Welter Trading Limited, and Vedanta Holdings Mauritius II Limited, along with other offshore companies within the promoter group. The move is tied to the issuance of three tranches of Guaranteed Senior Bonds by Vedanta Resources Finance II plc in June 2026.
The financial details of the bond issuance are as follows:
| Bond Type | Amount | Interest Rate | Maturity Date |
|---|---|---|---|
| Guaranteed Senior Bonds | US$ 500,000,000 | 7.000% | 2032 |
| Guaranteed Senior Bonds | US$ 700,000,000 | 7.375% | 2034 |
| Guaranteed Senior Bonds | US$ 550,000,000 | 7.750% | 2037 |
The arrangement is governed by a trust deed dated July 13, 2026, involving GLAS Agency (Hong Kong) Limited, the Issuer, and Vedanta Resources Limited. Supplemental trust deeds will be executed among the promoter group entities to further define the obligations associated with these bonds.
Restrictions on Promoter Group Entities
As part of the terms and conditions governing the Bonds, the promoter group entities are restricted from creating or maintaining any encumbrance or security interest over assets directly held by them unless specific conditions are met. This includes specific requirements for Twin Star Holdings Limited, Welter Trading Limited, and Vedanta Holdings Mauritius II Limited regarding the acquisition or disposal of shares in the listed Indian subsidiaries.A key condition stipulates that Vedanta Resources Limited and its direct or indirect subsidiaries must retain control over Vedanta Limited. Specifically, they are required to own at least 50.1% of the issued equity share capital of Vedanta Limited. In the event of a default as defined in the trust deeds, the promoter group entities face specific limitations on asset disposal.
Impact on Vedanta Limited Holdings
The creation of encumbrance involves a significant portion of the equity share capital of Vedanta Limited. The details regarding the shares involved are presented below:| Metric | Details for Vedanta Limited |
|---|---|
| Number of Shares (Encumbrance) | 2,139,794,759 |
| Percentage of Total Diluted Share Capital | 54.72% |
| Date of Encumbrance Creation | July 13, 2026 |
The group clarified that no pledge has been created by any promoter group entities or associated offshore companies over the equity shares of the listed Indian subsidiaries in relation to these bonds as of the current date. The specific obligations for Twin Star Holdings Limited, Welter Trading Limited, and Vedanta Holdings Mauritius II Limited will take effect upon the execution of the relevant supplemental trust deeds.
VEDL Stock Price Movement
Vedanta Limited shares on Wednesday tumbled 2.67% to settle at ₹260.55. The stock plunged to its 52-week low amid a trading volume of 21.70 million shares.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
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