We are discussing After Securing $450 Million, OYO Plans to Refile IPO Papers For Refinancing a Loan:
Oyo, a travel tech company, is preparing to refile IPO papers for a refinancing loan as it nears finalization rounds. The company was looking to raise $450 million by selling dollar bonds. The financing round is expected to be led by JP Morgan. According to a report by PTI, the bond is expected to carry a 9% to 10% interest rate per year.
The company is already planning to refile an updated version of DRHP after the completion of bond insurance. Oyo has already submitted the documents to withdraw its draft red herring Prospectus with the market’s regulator, SEBI. The refinancing will surely make material changes to OYO’s financial statements. Therefore, as per the existing rules of SEBI, it will need to revise its filings with its regulator.
The company aims for $350-$450 million through bond insurance at an estimated interest rate of up to 10%. According to Social News XYZ, the refinancing will result in annual interest savings of $8 to $10 million in its first year after accounting costs associated with bond insurance. The company estimates its annual savings to be around $15 TO $17 million.
The company mentioned that the decision to refinance is at an advanced stage, so they are pursuing the revised financial plan, as the IPO approval with the current one does not make any sense. Some reports also mentioned the time of the whole refinancing process, extending the repayment time to five years from 2026, which will be completed in the next three months. According to a report by PTI, an individual close to the company’s IPO plans said that the refinancing is predicted to have annual interest savings of $ 10 million in the first year after accounting costs associated with bond insurance.
Before the post-refinancing round, the company will be open for an equity round to get investors’ confidence before public listing to gain financial strength. In 2021, OYO filed preliminary documents with the Securities and Exchange Board of Indi for Rs 8,430 crore IPO. The IPO launching was delayed due to market conditions, as the company had to settle for a lower valuation of $4 to $6 billion instead of a predicted valuation of $11 billion.
FAQ’s
Why is OYO refiling its IPO papers?
OYO is refiling its IPO papers primarily to refinance a substantial loan, which will help reduce interest costs and improve the company’s financial health.
How much funding did OYO secure recently?
OYO secured $450 million in its recent funding round.
Who are the investors in this recent funding round?
While the specific investors have not been disclosed, OYO has a history of attracting global investors, including SoftBank, Sequoia Capital, and Lightspeed Venture Partners.
What will OYO do with the funds from the IPO?
The funds from the IPO will be used primarily to refinance existing debt, expand global operations, invest in technology, and strengthen its market position.
When did OYO initially plan to go public?
OYO initially planned to go public in late 2021 but had to pause due to market volatility and regulatory changes.
Conclusion
A travel tech company, OYO, is preparing to refile IPO papers for a refinancing loan as it is nearing the finalization rounds. The company was looking to raise $450 million by selling dollar bonds. The financing round is expected to be led by JP Morgan. According to a report by PTI, the bond is expected to carry a 9 to 10% interest rate per year. The company’s IPO plans said that the refinancing is predicted to have annual interest savings of $ 10 million in the first year after accounting costs associated with bond insurance. Before the post-refinancing round, the company will be open for an equity round to get investors’ confidence before public listing to gain financial strength.
