Image Source : Google
OYO, the global travel technology platform owned by Oravel Stays, has withdrawn its Draft Red Herring Prospectus (DRHP) filed with the Securities and Exchange Board of India (SEBI) which was for its proposed Rs 8,430 crore IPO. The decision is being made as the SoftBank-supported company completes arrangements to secure $450 million by issuing dollar bonds, aimed at refinancing its current debt.
As per reports, OYO has submitted an application to SEBI to retract the existing DRHP as part of its refinancing strategy. Following the bond issuance, the company intends to submit a revised DRHP, anticipating significant alterations to its financial records.
The refinancing process will bring about significant alterations in OYO’s financial statements. Consequently, in accordance with prevailing regulations, the company will be required to amend its submissions to the regulatory authority,” a source closely linked to OYO’s IPO preparations informed PTI. “Given the advanced stage of the refinancing decision, it is not logical to proceed with the current financial figures for IPO approval. Thus, withdrawing the current application is a prudent step,” the source added.
OYO IPO: Know full story behind Ritesh Agarwal-led firm withdrawing DHRP – Refiling papers after…https://t.co/si5zgMoxtY
— ET NOW (@ETNOWlive) May 18, 2024
The refinancing will reduce around Rs. 66.4–83 crore in interest during the first year. After that, the company expects to save $15–17 million (around Rs 124.5–141.1 crore) annually, which will add on to its net earnings.By using the repurchase mechanism, OYO was able to pay down a large amount of its Rs 1,620 crore debt, bringing its remaining Term Loan B balance down to about $450 million.
In September 2021, OYO originally submitted its IPO with the goal of achieving a valuation of approximately $11 billion. Nevertheless, because of the unstable market conditions, the launch was postponed, leading the company to reassess its valuation. OYO is currently getting ready for a possible valuation between $4 and $6 billion.The decision to withdraw the DRHP and then refinance is intended to enhance OYO’s financial position and prepare for a successful IPO launch in the near future.
w
