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Oyo Hotels seeks to raise $600 mn loan, offers
generous terms to investors
Oyo's loan also features maintenance covenants, which are usually only included for companies that are
considered risky by investors.
Oyo Hotels, one of India’s most valuable startups, is offering unusually generous terms to investors as it seeks to
raise $600 million in debt, following a fresh surge of coronavirus cases in its home country that decimated travel
and undercut its recovery plans.
Oravel Stays Pvt, as the parent company is officially known, is discussing with banks and investors a five-year
term loan B at 850 basis points over Libor, higher than the usual guidance given for recently issued term loan Bs in
the Asia-Pacific market, according to Bloomberg-compiled data. The interest rate is similar to the 875 basis points
over the BBSY benchmark paid by Mission Group BidCo Pty Ltd on a seven-year term loan B signed in June
Oyo’s loan also features maintenance covenants, which are usually only included for companies that are
considered risky by investors. The loan announcement confirms an earlier report by Bloomberg News.
The company is hosting a lender call on May 21 and JPMorgan Chase & Co. is arranging the deal. Commitments
for the loan are due by June 2.
Oyo is one of the largest startups in Softbank Group Corp.’s portfolio and its headlong global expansion was
backed and fostered by the investor’s billionaire founder, Masayoshi Son. While the startup was most recently
valued at $10 billion, its business has been crushed after the rapid spread of the virus hit travel, following
operational missteps that soured partnerships with hotel owners.