OYO, the global travel tech company backed by SoftBank, plans to refile its initial public offering (IPO), reported PTI via Business Standard.
In September 2021, OYO submitted preliminary documents to the Securities and Exchange Board of India (SEBI) for an IPO worth Rs84.3bn ($1.01bn).
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However, the IPO launch was postponed due to market volatility, prompting the company to consider accepting a reduced valuation.
The latest move comes as the company is on the verge of finalising its refinancing plans, which include raising up to $450m through the sale of dollar bonds.
The company has engaged JP Morgan as the likely lead banker for the refinancing.
The sale of dollar bonds is anticipated to carry an interest rate of approximately 9% to 10% per annum.
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By GlobalDataSubsequently, OYO has withdrawn its draft red herring prospectus (DRHP) with the markets regulator, SEBI.
The company plans to submit an updated version of the DRHP following the bond issuance.
This proposed bond issuance is expected to provide OYO with a more favourable repayment schedule, extending the timeline to five years.
A source engaged with the company’s IPO preparations informed PTI: “The refinancing will result in material changes to OYO’s financial statements. Hence as per existing regulations, it will need to revise its filings with the regulator.
“Since the decision for refinancing is at an advanced stage, it doesn’t make sense to continue pursuing IPO approval with the current financials. So it’s prudent to withdraw the current application.”
In November, OYO’s parent company Oravel Stays prepaid a portion of its debt, totalling Rs16.2bn, through a buyback.
This is said to have involved repurchasing 30% of its outstanding Term Loan B (TLB), amounting to $660m, reducing its outstanding loan balance to approximately $450m.
Moreover, the bond issuance is projected to reduce the current effective interest rate of 14% on its existing $450m TLB facility.
In February 2024, OYO announced its entry into India’s sports hospitality domain. It shortlisted 100 hotels across 12 key cities, to meet the accommodation requirements of large sports events.
