Ride hailing platform Ola on December 16 said it has raised $500 million in debt from international institutional investors.
The company has raised this amount through Term Loan B (TLB). Institutional investors who want higher returns and can stay invested for a longer period of time than traditional banks offer such loans. TLBs usually have a floating interest rate with a tenure of five to seven years.
“The proposed loan issuance received a staggering response from investors with an interest and commitment of approximately $1.5 billion… This includes ride hailing, vehicle commerce, food items, instant commerce and distribution with financial services,” Ola said in a statement.
It said S&P and Moody’s added Ola’s first lien term loan to the Indian ride hailing business based on strong unit economics and profitability in their market, with a ‘stable’ outlook as B- and B3 respectively Was.
“The overwhelming response to our Term Loan B is a reflection of the strength of our business and our continued focus on improving unit economics along with rapid growth. Bhavish Agarwal, Founder and CEO, Ola, said, “At Ola “We are accelerating our journey towards building a new mobility ecosystem to help one billion people move forward in a sustainable manner.”
JP Morgan and Deutsche Bank acted as joint principal arrangers for this financing.
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