Travel-tech platform OYO, owned by Oravel Stays, is set to refile its draft-red herring prospectus (DRHP) with the capital markets regulator Sebi as the Softbank-backed global hospitality chain is finalizing its plans to raise $450 million via sale of dollar bonds, reported the news agency PTI citing sources.
JP Morgan is the likely lead banker for the refinancing through the sale of dollar bonds at an estimated interest rate of 9 to 10 per cent per annum, a media outlet said in its report. OYO has moved its application with the capital markets watchdog to withdraw its current DRHP in preparation for the latest refinancing.
Oravel Stays, the parent company of OYO, is looking to refile an updated version of the DRHP, after the bond issuance. Prior to this, it had prepaid a significant chunk of its debt amounting to Rs 1,620 crore through a buyback process. The buyback involved repurchasing 30 per cent of its outstanding Term Loan B of $660 million.
A source closely involved in the company’s IPO plans told 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,” he added.
OYO had filed preliminary IPO documents with the Securities and Exchange Board of India (Sebi) for a Rs 8,430 crore IPO in September 2021. The IPO was delayed due to the then volatile market conditions and the company prepared to settle for a lower valuation at around $4-6 billion instead of the $11 billion it was targeting initially.