Ola Electric held talks on potential highyield debt financing: Sources

Ola Electric Mobility Ltd, an Indian electric vehicle maker whose shareshave fallen about 50 per cent this year, recently held talks with lenders toexplore raising money through high-yield debt, according to peoplefamiliar with the matter.

The company was seeking about 10 billion rupees ($116 million), primarilyfor working capital, said the people, who asked not to be identifiedbecause the discussions are private. The talks were preliminary, and it’snot clear if Ola or the lenders would choose to proceed further, thepeople said.

Potential details that were discussed included the tenor of anyborrowing, which could be about 36 months, according to the people.They added that at least some of the potential lenders would treat this asspecial situation financing, and would ask for an interest rate between17.5 per cent and 20%,That range is typical for such deals that ofteninvolve businesses facing a liquidity crunch.

“Raising working capital is a routine aspect of running a businesssomething Ola Electric, and virtually every other company, doesregularly,” said an Ola Electric spokesperson, “Your claims arespeculative and misleading and we decline to comment further on this topic.”