A few days after Oyo founder Ritesh Agarwal entered into a pact to buy back shares worth $2 billion from early investors, a three-member consortium of Japanese lenders reportedly has funded the share repurchase move of the hospitality firm, said a media report.
Japanese financial groups Mizuho and Nomura Holdings are reportedly the main lenders who have financed Agarwal’s share buyback in Oyo Hotels & Homes while the identity of the third lender could not be verified, said a report in The Economic Times quoting people in the know of the development.
Three-year loans have been given against shares and they are expected to be repaid during Oyo's proposed initial public offering (IPO) in three years time, said the report, adding the financing deal has set a new valuation benchmark for the hospitality firm at $10 billion.
On Friday, Oyo had said Agarwal signed a deal to buy back shares worth nearly Rs 13,770 crore from early investors through his Cayman islands-registered entity, RA Hospitality Holdings, to almost triple his stake in the company.
Lightspeed Venture Partners and Sequoia India, Oyo's early supporters, are selling part of their holdings in order to help the founder increase his stake while remaining invested significantly in the company's long-term mission, Oyo said in a statement.
On 16 July, Oyo had announced the entry into a new vertical, Oyo Workspaces, targeting the co-working opportunity in India with an aim to have 50 centres across the country having a total seat count of around 35,000 by the end of 2019.
It also formally announced the acquisition of co-working firm Innov8 during the year. Currently, Innov8 has 16 centres across the country with over 6,000 seats.
While the companies did not disclose the financial details of the acquisition, according to the sources in the know of the matter, Innov8 was acquired for around $30 million (about Rs 205 crore). The entire team of Innov8 has also joined Oyo as part of the deal.
On 10 July, the hospitality firm had said that it emerged as the world's third-largest hotel chain as per room count with 8,50,000 rooms in its portfolio.
In a span of six years, the company expanded its presence to over 800 cities, more than 23,000 Oyo-branded hotels and 8,50,000 rooms, Oyo said. This growth is backed by a strong balance sheet of about $1.5 billion, it added.
In May, Oyo claimed that it became the second-largest hotel group in China within 18 months of its foray into the country, with presence in 320 cities and nearly 10,000 Oyo-branded hotels with 4,50,000 rooms.
In the first week of May, Oyo had agreed to acquire Amsterdam-based vacation rental company @Leisure Group from Axel Springer for an estimated $415 million (over Rs 2,885 crore).
The acquisition will help Oyo move a step closer in realising its vision of becoming a global real estate brand while maintaining leadership in the hospitality industry, Oyo said.
According to sources in the know of the matter, the acquisition cost is $415 million (around Rs 2,885 crore).
— With PTI inputs
Updated Date: Jul 23, 2019 15:16:48 IST