After reporting its first-ever profitable quarter in the July-September period, Oyo is all set to prepay a significant chunk of its debt amounting to ₹1,620 crore through a buyback process.
The repayment of this debt is scheduled for June 2026. The offer is being fully funded with cash on the balance sheet and from a cash collateral account.
Under the buyback initiative, the global travel tech player will repurchase 30 per cent of its outstanding Term Loan B (TLB), as per an announcement by the IPO-bound company on the Bloomberg terminal.
The move to prepay debt has come after the company reported its first-ever quarterly profit of ₹16 crore in the September quarter of FY 23-24. If the buyback goes as per plan, Ritesh Aggarwal's firm will witness a substantial reduction in OYO's interest outgo by ₹225 crore per annum.
The buyback is being done at par value through a public bidding process, which is open from November 14-18. If the bid surpasses the stipulated amount, then Oyo will buy the loan back on a pro-rata basis.
As per trade terminals, Oyo's debt paper closed at 90 cents per dollar on November 13 as per trading terminals. The company had disclosed in its last filing that it attained operational profitability in FY23, clocking an adjusted EBITDA of ₹277 crore.
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The company is also expecting to clock an adjusted EBITDA of nearly ₹800 crore in the current financial year. Earlier, OYO founder Ritesh Agarwal had told employees that the company had turned cash flow positive in the fourth quarter of FY23 and will end the quarter with nearly ₹90 crore surplus cash flow.
In FY 23, Oyo's adjusted gross profit margin, rose to 43 per cent of revenue and its adjusted gross profit improved by 23 per cent to ₹2,347 crore in FY23 from ₹1,915 the previous year.
