New Delhi, Fitch Ratings on Monday announced it has upgraded the ratings of Oy parent firm Oravel Stays, citing the hospitality company's improved financial profile.
According to a statement, Fitch has raised Oravel Stay's long-term foreign and local currency issuer default ratings to 'B' from 'B-' with a 'stable' outlook.
It raised the rating on the US$660 million senior secured term loan facility due in 2026 to 'B' from 'B-'.
Fitch said, "The upgrade reflects our estimate that Oyo's EBITDA leverage will remain below 5x on continued EBITDA growth amid cost savings, near-term market demand improvement and Oyo's US$195 million debt repurchase in November 2023." Will be done." ,
The upgrade comes soon after Oyo reported a net profit of about Rs 99. crore (US$12 million) in 2023-24, founder Ritesh Aggarwal told employees at a townhall last week.
"Oyo's liquidity is adequate due to substantial cash balances and expectations of positive free cash flow from the financial year ending March 2022 (FY25)," Fitch said.
OYO recently repurchased US$195 million (Rs 1,620 crore) of debt.
Fitch also highlighted Oyo's adequate liquidity position with unrestricted cash of approximately USD 9 million as of March 2024, which is higher than their post-deb buyback expectation of USD 80-90 million.
"We believe Oyo's improving profitability and declining leverage should support its ability to refinance the debt in time," Fitch said.
The rating agency said it expects the travel and tourism industry situation to continue to improve in Oyo's key markets in FY2025.
According to a statement, Fitch has raised Oravel Stay's long-term foreign and local currency issuer default ratings to 'B' from 'B-' with a 'stable' outlook.
It raised the rating on the US$660 million senior secured term loan facility due in 2026 to 'B' from 'B-'.
Fitch said, "The upgrade reflects our estimate that Oyo's EBITDA leverage will remain below 5x on continued EBITDA growth amid cost savings, near-term market demand improvement and Oyo's US$195 million debt repurchase in November 2023." Will be done." ,
The upgrade comes soon after Oyo reported a net profit of about Rs 99. crore (US$12 million) in 2023-24, founder Ritesh Aggarwal told employees at a townhall last week.
"Oyo's liquidity is adequate due to substantial cash balances and expectations of positive free cash flow from the financial year ending March 2022 (FY25)," Fitch said.
OYO recently repurchased US$195 million (Rs 1,620 crore) of debt.
Fitch also highlighted Oyo's adequate liquidity position with unrestricted cash of approximately USD 9 million as of March 2024, which is higher than their post-deb buyback expectation of USD 80-90 million.
"We believe Oyo's improving profitability and declining leverage should support its ability to refinance the debt in time," Fitch said.
The rating agency said it expects the travel and tourism industry situation to continue to improve in Oyo's key markets in FY2025.
