OYO Considers Refinancing $660 Mn Loan Amidst IPO Delays

Amid delay in its IPO, Delhi NCR-based hospitality unicorn OYO is in talks to refinance a $660 Mn loan with Apollo Management.

The term loan B was availed by OYO during the height of the COVID-19 pandemic in 2021, when its core business was down as travel and tourism industry came to a standstill.

The hotel aggregator is looking to extend the maturity deadline of its loan to 2027, compared to the existing deadline of 2026, a Bloomberg report said.

A decision could be reached as early as next month.

“We regularly get approached for cheaper financing options but the board hasn’t approved anything, including prepaying some portion,” an OYO spokesperson said on the matter.

OYO, which has been looking to go public, has hit multiple snags on its way to the bourses. The hospitality major had received a nod from India’s market regulator SEBI for an IPO worth INR 8,430 Cr in January 2022. However, given the prevailing adverse market conditions at the time, OYO decided to put its IPO in cold storage.

In a recent internal email to OYO’s top brass, founder and CEO Ritesh Agarwal claimed that OYO is on the way to reporting its first-ever profitable quarter in the second quarter of FY24.

He claimed that the hospitality giant will mark its maiden profit of INR 16 Cr for the period spanning July to September 2023.

Furthermore, the email highlighted that the IPO-bound unicorn recorded a 14% surge in its operating revenue, reaching INR 5,463 Cr in FY23. The company also managed to reduce its losses by 38%, reporting INR 1,286 Cr in FY23, a reduction from the previous year’s INR 1,939.8 Cr.

The developments at OYO come at a time when several key executives recently departed the hospitality unicorn. Ankit Gupta, OYO’s India CEO, and Mandar Vaidya, the head of OYO Europe, both moved out of OYO last month.

Prior to these departures, the company undertook a significant management overhaul. This reshuffle led to the founder, Ritesh Agarwal, delegating more roles to his core team.

In these changes, Gautam Swaroop, the CEO of OYO International, assumed responsibility for OYO’s affiliated ventures, such as Weddingz. Furthermore, COO Abhinav Sinha’s role was redefined as the Chief Product and Technology Officer.

It must be noted that Agarwal recently joined the TV show Shark Tank India as a shark for its upcoming season.