OYO to prepay over Rs 1,600 Cr debt via buyback
The repayment of this debt is scheduled for June 2026. The offer is being fully funded with cash on the balance sheet and from a cash collateral account.
Global travel-tech player is set to prepay a significant chunk of its debt amounting to Rs 1,620 crore through a buyback process. The buyback initiative involves the repurchase of 30% OYO's outstanding Term Loan B (TLB), as per an announcement by the IPO-bound company on the Bloomberg terminal.
The repayment of this debt is scheduled for June 2026. The offer is being fully funded with cash on the balance sheet and from a cash collateral account.
The move comes on the back of Ritesh Agarwal-led startup reporting its first-ever profit in the second quarter of 2023-24, with a Profit After Tax (PAT) of Rs 16 crore.
A successful buyback of the full quantum on offer will mean a substantial reduction in OYO's interest outgo by Rs 225 crore per annum.
The buyback is being done at par value through a public bidding process, which is open from November 14-18. If the bid exceeds the stipulated amount, then OYO will buy the loan back on a pro-rata basis.
OYO's debt paper closed at 90 cents per dollar on November 13 as per trading terminals.
In its last public filing, OYO had disclosed that it achieved operational profitability in FY23, clocking an adjusted EBITDA of Rs 277 crore.
Earlier, OYO founder Ritesh Agarwal shared with employees that the company had turned cash flow positive in the fourth quarter of FY23 and will end the quarter with nearly Rs 90 crore surplus cash flow.
The company also expects to clock an adjusted EBITDA of nearly Rs 800 crore for FY24.