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OYO

OYO’s JV MyPreferred Transformation secures Rs 50 Cr in debt financing

OYO

India’s major budget hotel chain OYO is on acquisition and expansion spree of late. The company has been duly indulged in various strategic acquisitions and business restructuring for one year.

In September, its holding entity, Oravel had sprouted two new joint venture (JV) entities in partnership with its largest investor, SoftBank which were named as ‘Mountainia Developers and Hospitality’ and ‘MyPreferred Transformation and Hospitality’.

In the latest development, the Gurugram-based company has secured Rs 50 crore for MyPreferred Transformation in the first external round of debt financing from non-banking finance company Avendus Finance.

The joint venture would deploy these fresh proceeds towards upgrading and designing its quality living spaces for Indian hotel assets, cited in an ET report.

MyPreferred Transformation and Hospitality was set up by Oravel Stays in conjunction with SoftBank controlled SB Topaz for hotel refurbishing, renovations, and rebranding.

According to the incorporation documents, company’s another JV Mountainia Developers was set up to acquire new hotel properties for the hotel chain and its operations include buying fully developed real estate setups and land acquisitions to develop new hotel properties as well.

The main motive behind dividing the company’s functions is to allocate focus and increase efficiency in all areas of operations in a proper manner.

Besides, OYO has also registered a third entity named OYO Financial and Technology Services reportedly, apart from the two JVs with Softbank.

This development has come just one week after OYO’s founder Ritesh Agarwal’s ambitious $1.5 billion stock buyback plan received clearance from the Oravel. 

This validation which had earlier received a green signal from the Competition Commission of India (CCI) also, will allow Agarwal to facilitate a transaction through freshly formed Cayman-based RA Hospitality Holdings.

Last month, OYO and SoftBank had also jointly acquired an 80% stake in Japanese rental apartment operator MDI for an estimated $100 million investment.

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