MakeMyTrip raises $330M in equity financingTeam YS
MakeMyTrip, the NASDAQ-listed online travel company, yesterday announced that it has entered into definitive share purchase agreements for a placement of its ordinary shares, which is expected to generate gross proceeds to the company to the tune of $165 million (the “Placement”). The Placement and transactions with Ctrip and MIH are expected to generate total gross proceeds of $330 million, which is expected to close tomorrow.
Proceeds from the transactions will be used to fund business expansion, strategic investments, technology and product development, marketing and promotions, and working capital, aside from catering to general corporate purposes.
The company’s press statement said that under the terms of the share purchase agreements for the Placement, the company will issue 4,583,334 ordinary shares in aggregate to investors at a price of $36 per share. Morgan Stanley India Company Private Limited is acting as the sole placement agent in connection with this Placement.
Simultaneous to the Placement, MakeMyTrip also entered into share purchase agreements with Ctrip.com International Ltd. for the issuance of its ordinary shares to Ctrip and MIH Internet SEA Pte. Ltd., a subsidiary of Naspers Limited, for the issuance of the company’s Class B convertible ordinary shares (“Class B Shares”) to MIH. These transactions will generate an additional $165 million of gross proceeds to the company.
The share purchase agreement with Ctrip states that MakeMyTrip will issue 916,666 ordinary shares to Ctrip at a price of $36 per ordinary share, and will issue 3,666,667 Class B shares to MIH at a price of $36 per Class B share. The Class B shares issued to MIH will be convertible into ordinary shares of MakeMyTrip on a one-to-one basis.
Ctrip had invested $180 million in MakeMyTrip through convertible bonds in January last year. In October last year, MakeMyTrip and Goibibo had merged. While the size of the deal remains undisclosed, some industry estimates suggest that Goibibo was valued in the range of $500-$600 million. According to some media reports, the valuation of the combined entity is around $1.8 billion. The MakeMyTrip and Goibibo merger was one of the biggest consolidations in the online travel industry, and has served to boost the fortunes of the company that began its journey in the year 2000.