Indian travel-tech giant OYO is in a race against time. The company, once a rising star in the startup world, is now pushing hard to go public before October 2024, as per the Bloomberg report.
The reason? A $383 million debt repayment deadline that founder Ritesh Agarwal must meet- unless the company lists on the stock market.
According to a Bloomberg report, OYO’s creditors, including Mizuho Financial Group Inc., are insisting that Agarwal clear his dues if the IPO doesn’t happen on time. However, if OYO manages to go public this year, lenders might allow him to extend the repayment until 2027.
The billion-dollar bet that changed everything
As per the report, back in 2019, Agarwal made a borrowing of $2.2 billion to increase his stake in OYO and solidify his control over the company. The loan came with a personal guarantee from SoftBank’s Masayoshi Son, OYO’s largest investor.
But as per Bloomberg, the debt was restructured in 2022, and the first repayment is still pending.
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OYO has been eyeing a stock market debut for years, but the COVID-19 pandemic derailed its expansion and forced it to shelve those plans. Now, with financial pressure mounting, the company has resumed discussions with bankers about a possible listing. A valuation of up to $5 billion, as per Bloomberg citing sources.
What is at stake?
SoftBank remains the largest shareholder, holding over 40% of OYO. Agarwal, despite previous IPO setbacks, still owns more than 30%. With lenders closely watching his financial position, the coming months will decide whether OYO enters the stock market or if Agarwal will be forced to repay his massive debt.
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