Oyo has unveiled plans to prepay a substantial portion of its debt totaling Rs 1,620 crore through a buyback process. The company, on the brink of an IPO, is set to repurchase 30 per cent of its outstanding Term Loan B (TLB), the company revealed to Bloomberg.
The debt repayment, slated for June 2026, follows Oyo’s milestone of reporting its first-ever profit in the second quarter of the fiscal year 2023-24, recording a Profit After Tax (PAT) of Rs 16 crore. This profitability has paved the way for the ambitious debt prepayment initiative, positioning Oyo for enhanced financial stability.
The buyback endeavour is fully financed with cash on the company’s balance sheet and sourced from a dedicated cash collateral account. Notably, a successful buyback of the stipulated amount could lead to a reported reduction of Rs 225 crore per annum in Oyo’s interest outflow.
Oyo’s approach involves conducting the buyback at par value through a public bidding process, open from 14 to 18 November. In the event of bids surpassing the predetermined amount, Oyo has outlined a pro-rata basis for loan repurchase to ensure a fair and transparent process.
