According to a source familiar with the matter, SoftBank-backed Indian hotel chain Oyo Hotels is in negotiations to raise up to 450 million US dollars through US dollar bonds.
The Zhitong Finance App learned that according to a source familiar with the matter, Oyo Hotels, an Indian hotel chain supported by SoftBank (SFTBY.US), is in negotiations to raise up to 450 million US dollars through US dollar bonds. The once glamorous Indian startup is seeking refinancing to replace an existing high-cost loan as its listing is delayed.
According to reports, Oyo Hotels' parent company Oravel Stays Ltd., is discussing with bankers to raise 300 million to 450 million US dollars to repay term loan B due in 2026. The company borrowed $660 million in 2021. After paying off part of the loan last year, the company still has approximately $465 million outstanding. People familiar with the matter said that this refinancing will extend the repayment period to five years. The company plans to complete this refinancing in the second quarter.
After initial public offering (IPO) plans were thwarted, Oyo Hotels is seeking to reduce interest expenses and shift the focus to profitability. The company was profitable for the first time in the third quarter of last year. Rating agency Fitch said it will take positive rating actions for the company as the leverage ratio falls.
Oyo Hotels' founder Ritesh Agarwal has been seeking an IPO for the startup for a long time, and even negotiated equity financing with Malaysian sovereign wealth fund Khazanah Nasional Bhd earlier this year. Oyo Hotels is regarded as the Indian version of Airbnb, with a valuation of around $10 billion. Although the travel market has recovered from its trough during the pandemic, Oyo Hotels has yet to decide when to do an IPO.