Hedge fund Kyma Capital to take Vedanta dispute to US regulators

LONDON, Jan. 19 (Reuters) – Kyma Capital, founded by former Blackstone trader Akshay Shah, is preparing to file a complaint with U.S. regulators over a dispute with Indian billionaire Anil Agarwal over nearly $ 1 billion in loans by Vedanta Limited to its parent company, a source familiar with the matter told Reuters.

Kyma Capital, a London-based hedge fund that owns shares in Vedanta Limited, plans to file its complaint with the United States Securities and Exchange Commission in February and seek repayment of four loans totaling $ 956 million made by Vedanta Limited through its overseas subsidiaries at the parent company Vedanta. Resources.

Kyma wants this money returned to Vedanta Limited and hopes to benefit from any further increase in Vedanda Limited shares. Vedanta Resources is the vehicle through which Agarwal holds a 55.11% stake in the mining group Vedanta Limited.

The loans were detailed in a presentation to Vedanta investors in September last year, a document which was seen by Reuters.

A spokesperson who represents Vedanta Limited, Vedanta Resources and Agarwal in the case declined to comment when contacted by Reuters.

“Vedanta operates a good set of assets, including one of the largest zinc producers in the world and the sixth largest silver producer in the world. The debt of Vedanta Limited is sustainable, ”said the source. “The problem is what’s happening at the shareholder level.”

Vedanta Limited, a natural resources company primarily manufacturing copper and aluminum as well as zinc and silver through subsidiaries, is listed in India on the National Stock Exchange.

It also has American Depositary Receipts listed on the Nasdaq, thus placing it under the jurisdiction of the SEC.

Shah’s shareholding in Vedanta Limited is his first high profile transaction since leaving Blackstone and establishing Kyma Capital.

Vedanta Limited’s share price fell 32% at the start of October last year after the loan information was released in the investor presentation.

Kyma will ask the SEC to put additional pressure on the board of directors of Vedanta Limited to have loans repaid sooner and also because the SEC has a wide range of powers over the companies it regulates , the source said.

In November, Kyma detailed her concerns in a regulatory filing regarding what she called the transfer of value from Vedanta Limited to its parent company Vedanta Resources.

Just before that, the hedge fund filed a complaint with the Securities and Exchange Board of India and the board of directors of Vedanta Limited.

The complaint to Indian authorities has not yet given rise to any action, the source said.

Vedanta Limited shares have risen steadily as Agarwal in January launched a process to increase its stake in Vedanta Limited through Vedanta Resources to 65.11% from 55.11% previously. He is looking to buy the stake at 160 rupees per share.

Vedanta Resources has about $ 1.9 billion in bonds maturing over the next two years, and recently launched a consent solicitation to ask bondholders for permission to take on more debt. (Reporting by Abhinav Ramnarayan, Additional reporting by Sudarshan Varadhan in CHENNAI, editing by Rachel Armstrong and Jane Merriman)

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