Hospitality company Oyo Hotels and Homes raised debt funding of $660 million from global institutional investors through the term loan funding (TLB) route, according to a statement released by the firm. The Gurugram-based unicorn will utilise the funds to repay its past debts, strengthen its balance sheet, and other business purposes including investment in product technology, in a bid to revive its COVID-hit business.
The term loan funding route refers to a tranche of senior secured syndicated credit facility from global institutional investors. With the current round of funding, Oyo is among the first Indian startups to raise capital through the term loan funding route.
The offer or the proposed issuance was oversubscribed by 1.7 times and the company received commitments of close to $1 billion from the leading global institutional investors. Oyo said in its statement that the deal was upsized and increased by 10 per cent to $660 million driven by strong interest from marquee investors.
“...delighted by the response to OYO's maiden TLB capital raise that was oversubscribed by leading global institutional investors. We are thankful for the trust that they have placed in OYO's mission of creating value for owners and operators of hotels and homes across the globe,'' said Abhishek Gupta, Group Chief Financial Officer, OYO.
''...Our two largest markets have demonstrated profitability at the slightest signs of industry recovery from the COVID-19 pandemic,'' he added.
“As a part of OYO's board, it's heartening for me to see the strong interest from the investor community in the company, leading OYO to become the first Indian startup to be independently assessed by the world's leading credit rating agencies – Moody's and Fitch,'' said Dr. W. Steve Albrecht, a member of OYO's Board of Directors and Chairman of the Audit Committee.
Founded in 2013 by Ritesh Agarwal, Oyo is now a leading multinational chain of leased and franchised hotels, homestays, and living spaces. Initially, Oyo consisted of only budget hotels but gradually, the startup expanded globally with vacation homes, hotels, and rooms across various countries.