Udaan has lined up $160 million in financing just weeks after creditors initiated insolvency proceedings against its Singapore-based parent. This deal—a mix of fresh equity, new debt, and debt-to-equity conversion—is a direct response to a $170 million default on convertible notes. For existing bondholders, this package offers a way out of a messy legal battle that could have impacted India operations.
How We Got Here
Earlier this month, creditors began insolvency proceedings against Udaan’s offshore holding company after it defaulted on $170 million in convertible notes that matured on June 30. Creditors had previously rejected the company's debt restructuring proposal, leading to the legal action.
The Numbers
- The deal includes a $45 million private credit commitment from an unnamed "world's leading investment management firm."
- Existing bondholders will convert a portion of their $170 million outstanding debt into equity; the remainder will be extended on revised terms.
- Udaan states the insolvency proceedings affect only its offshore holding company, not its India operations.
- Over the last 10 quarters, Udaan reported a 25% CAGR in revenue while improving contribution margins by 500 basis points.
What Happens Next
🇮🇳 Why This Matters for India
For the thousands of small and medium businesses in cities like Indore and Nagpur relying on Udaan's B2B marketplace, this stability means continued access to credit and logistics.
The Take
This capital infusion buys Udaan time, but a successful IPO remains a distant prospect unless the core B2B unit shows consistent, significant profitability. The real winners here are the original convertible note holders who managed to get a revised deal rather than a full write-off.
Source:
Inc42 ↗