Oaktree invests Rs 1,600 crore in Sesa’s bonds

Mumbai: An Oaktree Capital fund invested ₹1,600 crore in 18-month bonds raised by Sesa Resources, a wholly owned subsidiary of Mumbai-listed Vedanta, people with knowledge of the matter told ET.

The bonds are initially garnered at a 10% coupon but will be raised to 15% in the event of a default, they added.

The funds are raised by mortgaging fixed and movable assets of Vedanta and Sesa Resources. The company has also pledged its entire shares as security against loans.

Oaktree Capital declined to comment while the Vedanta Group did not respond to ET’s request for comments.

The fundraising in the last week of March by Sesa Resources has surprised lenders since the company has been non-operational for more than five years.

“It is likely that Vedanta is raising funds for its capex via Sesa Resources since it may not have adequate security to pledge against the loan,” said a third person. “On the other hand, Sesa Resources’ assets are not pledged, and it does not have any significant debt,” he added. The unlisted subsidiary is in the mining business in Goa and the domestic sale of iron ore, the company’s annual report for FY23 said.