Deal Closed | Oaktree Capital Management L.P. | Acquisition Financing

Oaktree agrees $400-mn Vedanta Resources debt investment

Announcement Date: 29-Dec-2020 

Completion Date: 29-Dec-2020 

Name of Client: Oaktree Capital Management L.P. 

Deal Description: Khaitan acted as the sole Indian legal adviser to OCM Verde XI Investments Pte. Ltd. (“Lender”) with respect to the offering of guaranteed and secured private placed notes aggregating up to USD 1,000,000,000 (“Notes”) by Vedanta Holdings Mauritius II Limited (“Issuer”) to fund the acquisition of shares of Vedanta Limited (“VEDL”) by the Issuer and/or Finsider International Company Limited (“FICL”), in accordance with applicable laws.  

 The Notes are guaranteed by Vedanta Resources Limited, FICL and Westglobe Limited (“Westglobe”). The Notes are further secured by a collateral package consisting of, inter alia,  

(i) a first ranking pledge over 100% of the shares of the Issuer held by FICL;  

(ii) a first ranking pledge over 100% of the shares of FICL held by Westglobe and Richter Holdings Limited; and 

(iii) a first ranking pledge over 100% of the shares of Westglobe held by Richter Holdings Limited. 

 OCM Verde XI Investment Pte. Ltd. acted as the Calculation Agent and the Security Agent for the Lender. Axis Trustee Services Limited acted as the Escrow Agent for the Lender, FICL, Issuer and Westglobe. Axis Bank Limited acted as the Custodian for FICL, Issuer and Westglobe. 

Total Consideration: USD 1 billion 

Team Members: The core team consisted of Manisha Shroff, Piyush Karn, Akshay Ferdinand, Siddhant Shetty, Kratika Parashar and Tikshta Modi with assistance from the following:  

Competition Law aspects: Rahul Singh and Alisha Mehra; 

Regulatory aspects: Sudhir Bassi, Moin Ladha, Anvita Mishra and Srijanee Bhattacherjee 

Role of Firm: Khaitan & Co acted as the legal advisor the Lender, the Firm has advised on the following:  

Due-diligence on Vedanta Limited and its material Indian subsidiaries and preparing a due diligence report in relation to it; 

• Review of transaction documents including Subscription Agreement, irrevocable powers of attorney, Custodian Agreement and other supporting documents from the perspective of Indian laws; 
• Drafting of Indian law governed documents, including the securities account control escrow agreement (“SACA”) and other related documents; 
• Advising on material disclosures; and 
• Advising on nuances under the Competition Act, 2002, Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. 

Other legal advisors if any  

Foreign Counsel to the:   

• Lender (English Law): Hogan Lovells 

• Lender (Cyprus Law): Harneys, Aristodemou, Loizides, Yiolitis LLC 

• Lender (Mauritius Law): Madun Gujadhur Chambers LLP  

• Issuer (English Law): Ashurst LLP 

Unique Feature of Transaction 

• Acquisition finance with cross-jurisdictional security  
• Financing at holding company level holding listed Indian company shares 
• Consent analysis and navigating the covenants in the offshore bond documents to finalise the covenant package for this financing 
• Advising on restrictions on security creation over Indian assets from a foreign exchange laws perspective and structuring the transaction 
• Advising on disclosures to Indian stock exchanges in relation to the deal 
• Building in protections in the documents for safeguarding the holding of the Holdco on the Indian listed company shares 
• Innovative Feature of the transaction 
• Acquisition Finance with Cross-Jurisdictional security 
• Advising on restrictions on security creation over Indian assets from a foreign exchange laws perspective and structuring the transaction 
• Advising on disclosures to Indian stock exchanges in relation to the deal 
• Building in protections in the documents for safeguarding the holding of the Holdco on the Indian listed company shares