[the_ad id="83613"]

MakeMyTrip looks to raise $200 Mn via convertible notes

Online travel agency and hotel booking platform MakeMyTrip is looking to raise $200 million in debt through convertible senior notes with a zero-coupon rate. The debt would be convertible and the sale to initial purchasers is expected to settle on February 9, a company statement said.

The notes offering was upsized by $25 million from the previously announced offering of $175 million. Importantly, the notes will not bear regular interest and the principal amount of the notes will not accrete.

MakeMyTrip estimates that the net proceeds from this notes offering will be approximately $194.5 million. However, it can go up to $223.7 million if the initial purchasers exercise their option to purchase additional notes in full.

Post maturity, the notes will be convertible into the company’s ordinary shares. Meanwhile, MakeMyTrip may repurchase all notes in 2024 and 2026, as well as in the event of certain fundamental changes.

The company intends to use the proceeds from the notes offering for working capital and other general corporate purposes. If the company mops up the debt capital, it will be a huge boost to its business that took a massive hit due to the ongoing pandemic.

The Gurugram-headquartered company had witnessed nil business for two months of 2020 – March 25 to May 25. To cope with the impact of the pandemic to its business, the company had to lay off several hundred contractual employees and also cut the salaries of its senior employees.

The offerings on the notes have come at a time when the Nasdaq listed MakeMyTrip saw improvement in gross booking and topline in its Q3 of FY21. Its gross booking jumped to $599 million in the quarter ending December 2020. This was a 182% jump on its Q2 gross bookings of $213 million.

While income from air ticketing reached $11 million from $18 million in the preceding quarter, revenue from hotel and packages grew 7X to $24 million in Q3 from $4 million during pandemic hit Q2.

About Author

Send Suggestions or Tips