In a strategic move, global travel-tech giant OYO is gearing up to proactively settle a substantial portion of its debt, amounting to ₹1,620 crore, through a comprehensive buyback process. The company, currently on the path to an initial public offering (IPO), has disclosed its intention to repurchase 30% of its outstanding Term Loan B (TLB), as confirmed through an official announcement on the Bloomberg terminal.
The debt repayment is slated for June 2026, and the entire buyback initiative is fully financed using funds from OYO's cash balance and cash collateral account. This decision follows the recent milestone of OYO reporting its inaugural profit in the second quarter of the fiscal year 2023-24, with a Profit After Tax (PAT) totaling ₹16 crore.
The successful completion of the buyback process will result in a noteworthy reduction of OYO's annual interest expenditure by a substantial ₹225 crore. The buyback, executed at par value, is facilitated through a public bidding process open from November 14 to November 18. Should the bids surpass the specified amount, OYO will repurchase the loan on a pro-rata basis.
As of November 13, OYO's debt paper was trading at 90 cents per dollar on various trading terminals. In its latest public filing, OYO revealed its operational profitability achievement in the fiscal year 2022-23, boasting an adjusted EBITDA of ₹277 crore.
Earlier communications from OYO founder Ritesh Agarwal indicated the company's positive cash flow status in the fourth quarter of FY23, concluding the period with a surplus cash flow of nearly ₹90 crore. Furthermore, OYO anticipates achieving an adjusted EBITDA of approximately ₹800 crore for the fiscal year 2023-24.
