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Miguel Cordon · · 1 min readReport: Oyo seeks $600m in debt financing as Covid-19 cases surge in India
“Oyo Hotels, one of India’s most valuable startups, is offering unusually generous terms to investors as it seeks to raise US$600 million in debt, following a fresh surge of coronavirus cases in its home country that decimated travel and undercut its recovery plans,” Bloomberg reported.
Details:
- Its parent entity Oravel Stays is holding talks with banks and investors for a five-year term loan B at 850 basis points over LIBOR, higher than the typical guidance for this type of facility in Asia-Pacific.
- The loan also features maintenance covenants, which are measures usually set in place for companies that are considered risky by investors.
Context:
- The development comes as daily Covid-19 cases in India soar in May, reaching over 400,000 early in the month.
- Oyo recently announced it will provide eight months’ worth of salary and other bereavement benefits to families of employees deceased due to the virus. It also rolled out a four-day working week to help its workers cope with the pandemic.
Editing by Collin Furtado and September Grace Mahino
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