Over Rs. 1,600 crore in debt would be repaid by OYO via buybacks

 Over Rs. 1,600 crore in debt would be repaid by OYO via buybacks

30% of Oyo's outstanding Term Loan B (TLB) would be repurchased as part of the buyback plan, the IPO-bound business said on Bloomberg Terminal.

Through a repurchase mechanism, the multinational travel technology startup OYO plans to pay off a significant portion of its Rs 1,620 crore debt early. 30% of Oyo's outstanding Term Loan B (TLB) would be repurchased as part of the buyback plan, the IPO-bound business said on Bloomberg Terminal.

This loan is due to be repaid in June 2026. The offer is fully financed from cash in the cash collateral account and balance sheet. The action was taken in response to the Ritesh Agarwal-led startup's Q2 2023–2024 profit after tax (PAT) report, which showed a profit of Rs 16 crore.

If the whole amount on offer is successfully bought back, Oyo's annual interest costs will be significantly reduced by Rs 225 crore. A public bidding mechanism is being used to complete the repurchase at par, and it will be available from November 14 to 18. OYO will purchase back the loan proportionately if the offer surpasses the predetermined amount.

Trading terminals show that OYO's debt paper closed at ninety cents per dollar on November 13. OYO reported operational profitability in FY23 with adjusted EBITDA of Rs 277 crore in its most recent public filing.

OYO Founder Ritesh Aggarwal had earlier informed staff members that the business had achieved cash flow positivity in Q4 FY23 and is expected to conclude the quarter with about Rs 90 crore in excess cash flow. For FY24, the business anticipates generating adjusted EBITDA of around Rs 800 crore.