One of the major hospitality firms, Oyo and its subsidiary in Singapore, Oyo Hotels (Singapore), has recently announced receiving a term loan of USD 204 million from leading investment bank, SoftBank’s UK entity- SB Investment Holdings.
Speculations have it that the newly generated loan facility would help the hospitality chain in Singapore to strengthen its operations, which have been worst hit by the outbreak of coronavirus pandemic.
It has been reported that the transaction was planned to take place in 2020, however, is being concluded now, just after the hotel brand started recovering from an extreme low booking rate during the lockdown phase last year.
Importantly, the company announced that its revenue per available room in January this year was nearly about 90% of business than the previous year, with the gross profit globally exceeding the January 2020 levels.
In the company fillings, it was mentioned that Oyo Hotels Pte Limited, Singapore had on 6th March filed a ‘Deed of the released of Charge’ which highlights that charges have been released on assets of the company’s subsidiaries including Oravel Stays (Singapore) Pte Limited, Oyo Vacation Homes Cayman, Oyo Hotels (Singapore), and Oyo Vacation Homes UK Limited, post the repayment of an outstanding loan of USD 430 million to SB Investment Holdings (UK).
Commenting on the recent move, Founder of Oyo Hotels, Ritesh Agarwal, cited that the hospitality chain is currently making development in recuperating from the coronavirus fallout and has about USD 1 billion to fund operations until external funds have been generated.
Also, while speaking on the payment of USD 430 million debt, Mr. Agarwal quoted that the outstanding transaction was a former refinancing through a prior debt agreed for execution during the crucial pandemic times for bolstering the company’s balance sheet.
For the record, the novel coronavirus pandemic had brought down the overall valuation of Oyo by 20% in 2020 to USD 8 billion from USD 10 billion in November 2019. Nevertheless, in early 2021, it secured a valuation of $9 billion from Hindustan Media Ventures Ltd.