Fitch trims Oravel

Fitch Ratings said it trimmed its ratings for Oravel Stays Ltd. (OYO) and its $660 million senior secured term loan facility due 2026, issued by subsidiary Oravel Stays Singapore Pte Ltd., to B- from B. The RR4 recovery rating on the facility is unchanged.

“The downgrade reflects significant uncertainty about whether OYO can achieve material EBITDA profit in the financial year ending March 2023 (FY23). The company faces execution challenges given the lacklustre recovery in travel demand in the price-sensitive markets where OYO operates. We believe that OYO will likely achieve meaningful EBITDA profit only in FY24, relative to our previous expectations of FY23,” Fitch said in a press release.

The agency said it forecasts OYO's FY23 revenue to increase by around 30%, much lower than Fitch's previous forecast, citing slower recovery in travel demand in its core markets and muted growth in the number of partnered hotels and homes.

The outlook is stable.

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