[Funding alert] OYO raises $660M term loan funding from institutional investors
has announced that it has raised a Term Loan B (TLB) funding of $660 million from global institutional investors. The hospitality unicorn in its statement said that the offer was oversubscribed by 1.7 times and the company received commitments of close to $1 billion from leading institutional investors.
The company will utilise these funds to retire its past debts, strengthen the balance sheet and other business purposes including investment in product technology.
Abhishek Gupta, Group Chief Financial Officer, OYO, said:
“This is a testament to the strength and success of OYO’s products at scale, our strong fundamentals and high-value potential. OYO is well capitalised and on the path of achieving profitability. Our two largest markets have demonstrated profitability at the slightest signs of industry recovery from the COVID-19 pandemic”.
OYO in its statement also said that it is the first Indian startup to be publicly rated by Moody's and Fitch, two of the leading international rating agencies. Fitch and Moody’s rated OYO’s senior secured loan B and B3 (stable outlook), respectively, on the back of the company’s sound business model and resilient financial profile with significant potential upside. This is a milestone transaction as OYO is the first Indian company to raise capital through the TLB route, OYO claims.
"The deal was upsized and increased by 10 percent to $660 million, the company’s fundamentals yielded strong interest from investors despite the virus surge. The interest margin rate was also lowered by 25 basis points from the Initial Pricing Guidance to LIBOR+825 basis points," it said in a statement.
JP Morgan, Deutsche Bank, and Mizuho Securities served as the lead arrangers for this financing.
OYO brings a suite of technology products for the hospitality industry.These products include CO-OYO, OYO OS, OYO YO!, OYO Tariff Manager, OYO Secure, OYO Wizard, and the consumer-facing OYO App, among others.
Edited by Anju Narayanan