According to reliable sources, US hedge fund Farallon Capital Management is currently in advanced talks to provide $1.5 billion to $2 billion in funding to mining billionaire Anil Agarwal, who is facing financial difficulties. This funding arrangement would replace discussions that Agarwal had been having with traditional foreign lenders or Gulf organizations like International Holding Corporation. The proposed structure includes $800-$900 million of the funding to be provided against corporate guarantees from Vedanta Limited (VDL), Agarwal's flagship listed Indian natural resources conglomerate, for which RBI approval is still pending. The remaining amount would be paid offshore to Agarwal's promoter entities. This financing, combined with his dividend income, is expected to help Agarwal meet his immediate refinance obligations and reduce his personal indebtedness. It is expected that the structured financing agreement, which is still being negotiated, will have a duration of 3-5 years and feature interest rates as high as 15-16% in US dollars. This is in line with the terms of Agarwal's previous $750 million loan from Oaktree, which was obtained via a share subscription agreement at a rate of 14%.
Previously, Agarwal had been attempting to increase bank financing for a $1 billion loan in THL Zinc Ventures, a fully owned subsidiary of India-listed Vedanta Ltd. However, discussions with his relationship banks, led by Standard Chartered Bank, JP Morgan, Barclays, and Deutsche Bank, were put on hold due to banks seeking aggressive pricing 300 basis points above the expected rate.
Farallon and Vedanta have not yet responded to requests for comment. In a recent credit call with investors, S&P analyst Neel Gopalakrishnan mentioned that talks with credit funds were ongoing. Farallon, headquartered in San Francisco, has recently specialized in illiquid special situations and has been supporting Indian corporates and their promoters, including Shapoorji Pallonji Group, Essar, Emami, Piramal Enterprises, and Indiabulls Group, in resolving balance sheet issues.
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