New Delhi, May 18 Hospitality major Oyo will refile its initial public offering (IPO) papers with markets regulator Securities and Exchange Board of India (SEBI) after refinancing its existing $450 million Term Loan B (TLB) at a lower interest rate.
Oravel Stays Ltd, which operates the travel-tech company Oyo, is close to finalising its refinancing plans where the company is considering raising $350-450 million (Rs 2,908.5 crore-Rs 3,739.5 crore) through a bond issuance, at an estimated interest rate of 9-10 per cent per annum, sources told IANS on Saturday.
This bond issuance would significantly lower the current effective interest rate of 14 per cent on its existing $450 million Term Loan B (TLB) facility with a repayment period of seven years.
“The refinancing is expected to result in annual interest savings of $8-10 million (Rs 66.4-Rs 83.0 crore) in the first year, after accounting for the costs associated with the bond issuance,” according to sources.
Oyo anticipates annual savings of $15-17 million (Rs 124.5 crore-Rs 141.1 crore) thereafter, almost all of which would get added to its net profits, sources added.
The refinancing will result in material changes to Oyo’s financial statements.
As per existing SEBI regulations, the company will need to revise its filings with the regulator.
JPMorgan is the lead banker for this refinancing.
According to the company, since the decision for refinancing is at an advanced stage, it doesn't make sense to continue pursuing IPO approval with the current financials.
According to sources, the time frame for the whole refinancing exercise to extend the repayment timeline to five years from the current 2026 will be completed in the next three months.
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