Vedanta Ltd's promoters cannot sell or create any security on shares they hold in the group as part of the terms attached to the recent USD 1.4 billion fund raising -- conditions which technically fall within the definition of 'encumbrance' but no pledge on shares has been created, the company said on Wednesday.

Vedanta had on Tuesday informed stock exchanges about its promoters raising USD 1 billion debt by issuing equivalent notes to Citicorp International Ltd and another USD 400 million in notes to an entity under Oaktree Capital Group. The notes in both cases will be partly secured by shares in the Mumbai-listed unit Vedanta Ltd.

"As per the terms of the notes issued, there are certain terms which restrict the promoter companies of Vedanta to create any security, or to sell, lease, transfer or otherwise dispose of any of their shares in Vedanta Limited held by them and / or to be acquired by them," the company said in a statement on Wednesday. These terms, it said, "technically fall within the definition of the term 'encumbrance' provided under Chapter V of the Takeover Regulations of SEBI" and hence the necessary standard disclosures have been filed.

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