India: Softbank-backed hotel chain OYO has secured a $ 660 million loan from global institutional investors, saying the offer was 1.7 times oversubscribed.
The deal came in the form of a B term loan [TLB], or an institutional term loan, including nominal repayment over five to eight years, and has been arranged primarily by JP Morgan, Deutsche Bank and Mizuho Securities.
Although the deal for the loan was originally made in May, OYO says it increased the deal by 10% from $ 600 million due to âstrongâ investor interest.
OYO says it will use the cash flow to pay off past debts, strengthen its balance sheet and invest in product technology.
The chain, which offers more than 43,000 hotels and 150,000 accommodations in 80 countries through its platforms, also claims to be the first Indian company to raise capital through the TLB channel, having been publicly rated by renowned international rating agencies, Moody’s. and Fitch.
OYO Group Chief Financial Officer Abhishek Gupta said: âWe are delighted with the response to OYO’s first TLB capital increase which was oversubscribed by major global institutional investors. We are grateful for the confidence they have placed in OYO’s mission to create value for hotel and home owners and operators around the world.
âThis is a testament to the strength and success of OYO products at scale, our strong fundamentals and our high value potential. OYO is well capitalized and on the path to profitability.
“Our two largest markets have demonstrated their profitability at the slightest sign of recovery in the industry after the Covid-19 pandemic,” he added.
Dr W. Steve Albrecht, OYO Board Member and Audit Committee Chairman, said: Become the first Indian startup to be independently rated by the world’s leading credit rating agencies – Moody’s and Fitch.
âToday, OYO has more than 100,000 partners around the world who run successful businesses using OYO’s proprietary technology, products and revenue management capabilities to provide trusted hosting to customers,â a- he added.
Earlier this year, OYO announced that its valuation had risen from $ 8 billion to $ 9 billion, following a $ 7.4 million Series F1 funding round in January, led by Hindustan Media. Venture. OYO said it will use the funding to strengthen its technology stack to improve the experience for its partners and customers.
The chain had already raised around $ 3.2 billion in capital in 17 funding rounds led by 23 investors, including SoftBank Vision Fund, Airbnb, Sequoia Capital, Lightspeed Ventures and Hero Enterprise.
Despite this, OYO was forced to lay off or put on leave a significant portion of its global workforce last year. [including making at least 90 per cent of its US team redundant] and restructure its operations in Japan, after recording increasing losses in consecutive years.
OYO raised up to $ 1.5 billion in Series F funding in October 2019, through its founder and CEO, Ritesh Agarwal, Softbank Group and other investors. It came as part of an expansion offer in the American and European markets, before the Covid-19 pandemic.