Even as the travel and tourism sector continues to reel below the pandemic effect, on line travel corporation MakeMyTrip has managed to attract investors to back its development ahead. The corporation has raised $200 million in debt by way of the problem of senior convertible notes at a zero-coupon price. The debt securities supplying was upsized by the corporation from the prior supplying of $175 million announced on Wednesday. Senior convertible notes are debt securities that provide an alternative to convert notes into a predefined quantity of the issuer’s shares and are somewhat economical for enterprises. On the other hand, the coupon price of a bond refers to the percentage of its face worth payable annually as interest. So, a zero per cent interest coupon bond entails no interest to be paid.
The initial purchasers of the notes also have a 30-day alternative to get up to an more $30 million in aggregate principal quantity of the notes. The sale to the initial purchasers is probably to settle on February 9, 2021. “The notes will not bear regular interest and the principal amount of the notes will not accrete. The notes will mature on February 15, 2028, unless earlier redeemed, repurchased, or converted in accordance with their terms prior to such date. The company may not redeem the notes prior to maturity, unless certain changes in tax law or related events occur,” according to a corporation statement. MakeMyTrip added that it intended to use the net proceeds from the supplying for working capital and other common corporate purposes.
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“This raise will bolster our cash reserves allowing us to meet the working capital requirements as business recovery gathers momentum and also pursue any investment opportunities in the growing Indian market. This raise at zero-coupon and conversion premium of 37.5% reflects the appetite of global investors to invest behind strong Indian brands and businesses,” stated Mohit Kabra, Chief Financial Officer, MakeMyTrip.
The corporation, in its Q3 FY21 benefits final month, had reported $56.8 million income, down 61.3 per cent from $146.9 million in the quarter ended December 31, 2019, mainly due to a decline of 62.1 per cent in its air ticketing income, 66.6 per cent decline in hotels and packages income, 43.1 per cent fall in bus ticketing income, and 49.9 per cent decline in income from other activities. “The decrease in revenue was primarily due to the continued impact of the Covid-19 pandemic, including lower travel demand due to travel restrictions,” the corporation had stated.