Ola Electric wants to raise $116M via debt financing
What's the story
Ola Electric, an electric vehicle manufacturer in India, has held preliminary talks with lenders for high-yield debt financing, as per Bloomberg. The company is said to be looking for around $116 million as working capital. The discussions come amid a difficult year for Ola Electric, which has seen its shares plummet by nearly 50% and faced several challenges including scooter fires.
Financing details
Lenders considering interest rates between 17.5-20%
The potential lenders are said to be considering interest rates between 17.5% and 20% for this financing. The talks were preliminary and it remains unclear if either party would decide to take things forward. The tenor of any borrowing could be around 36 months, sources familiar with the matter revealed.
Statement
What did Ola Electric say?
Responding to the reports of debt financing talks, an Ola Electric spokesperson said, "Raising working capital is a routine aspect of running a business, something Ola Electric and virtually every other company does regularly."
Struggles
Market share struggles
Ola Electric has struggled with market share erosion. The company's shares have been on a downward trend due to several crises, including cases of scooters catching fire. In June, as the stock price fell, founder Bhavish Aggarwal paid crores in cash to bolster the collateral for borrowings against the shares.