Indian hospitality major Oyo Hotels & Homes (Oyo) on Friday announced that it has secured $660 million in debt financing from global institutional investors.
In a statement, Oyo said its term loan B (TLB) was oversubscribed by 1.7 times, with a total commitment of nearly $1 billion.
The company had increased the offering size by 10% to $660 million from $600 million initially on the back of strong interest from institutional investors. The interest margin rate was also lowered by 25 basis points from the initial pricing guidance.
Oyo will utilise the funds to retire existing high cost debt, strengthen its balance sheet and for other business purposes, including investments in product technology, it 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,” Abhishek Gupta, Group Chief Financial Officer, Oyo, said.
Oyo, which counts SoftBank among its key shareholder, has raised over $4 billion in financing so far. The company’s operations, like those of other hospitality companies, were adversely impacted by the onset of the pandemic last year, leading to cost-cutting measures, including layoffs.
In a recent interaction with Reuters, Oyo founder and CEO Ritesh Agarwal said that the company expects the business to return to levels seen before the second wave of COVID-19 with travel demand slowly recovering in India.
JP Morgan, Deutsche Bank and Mizuho Securities served as the lead arrangers for the latest financing.