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Ola Raises $ 500 Million in B-Term Loan, Gets Moody’s B3 Rating


The Ola ridesharing platform is looking to raise up to $ 500 million in debt in the form of a B-term loan, which will also open up to credit agency ratings.

Moody’s Investors Service has assigned a corporate family rating of B3 (CFR) for the first time to ANI Technologies Pvt Ltd (Ola). Moody’s has assigned a B3 rating to the senior secured term loan offered by the company.

Ola’s wholly owned subsidiaries – Ola Netherlands BV and Ola USA Inc – are the borrowers. B3 falls under the non-investment grade category. The loan is guaranteed by Ola and its subsidiaries specializing in ridesharing services, Moody’s said.

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“Ola’s B3 CFR reflects its loss-making operations and the high execution risks associated with its international expansion plans as well as its venture into the competitive and fragmented sectors of food delivery and vehicle trading in India,” said Stephanie Cheong, assistant vice president and analyst at Moody’s.

Ola has ambitions to expand its presence in the UK, Australia and New Zealand, according to Moody’s rating. Moody’s expects that a high level of spending will be needed to support Ola’s growth plans, so that the company’s annual cash consumption (cash flows from operations minus capital expenditures) ) will double to $ 140 million for at least the next two years, from $ 73 million in the fiscal year ended March 31, 2021 (fiscal 2021).

Additionally, Moody’s added that Ola’s cash and cash equivalents of $ 279 million as of March 31, 2021 will only cover the company’s expected cash consumption and expected debt maturities through December 2022.

“Accordingly, the B3 rating is also based on the success of Ola’s term loan transaction as planned, which will provide the necessary liquidity to support its operations beyond the next 12 months, as well as to execute its growth plans. “Cheong said. , who is Moody’s senior analyst for Ola.

On the flip side, ratings will likely come under downward pressure if the proposed transaction is delayed or if funds raised fall below the company’s $ 500 million target, in the absence of any alternative financing that strengthens liquidity by the end of the year, Moody’s added.

The company is currently completing the pre-IPO funding round to raise capital from new and existing investors and also aims to complete a public listing by the first half of 2022.

(Edited by : Jomy Jos Pullokaran)


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