Magnum Ventures takes $6.3M Tata Capital loan to upgrade hotels, cut debt
What's the deal? Magnum VenturesDealroom has a profile for this one. Try Dealroom → secured a US$8.15M term loan from Tata CapitalDealroom has a profile for this one. Try Dealroom → to fund hotel upgrades and repay existing liabilities. The post-IPO debt facility carries a floating 12% annual rate — the Long Term Prime Lending Rate plus a 3.25% spread.
Where the money goes: The company split the facility across four uses. Up to US$3.4M funds upgrades to its RadissonDealroom has a profile for this one. Try Dealroom →-brand hotel assets; up to US$2.72M repays unsecured loans; up to US$1.36M partially repays a Tata Capital Financial Services loan; and US$679K covers general corporate purposes.
The terms: The loan runs 135 months, with monthly interest and equal quarterly principal repayments. Disbursement comes in two tranches, the second contingent on security perfection.
Why now? Magnum has leaned on new borrowing to retire costlier debt, including an earlier US$20.4M loan at 13% to part-redeem non-convertible debentures and prior issuance at 18%. At 12%, the Tata Capital facility signals a push to lower financing costs.
What could go wrong? The rate is floating and tied to Tata Capital's lending benchmark, which stood at 8.75% at disclosure. A key sweetener — a 75-basis-point cut — only kicks in after Magnum demerges its hotel division from its paper division, leaving timing and covenant risk if that split slips.
The signal: The loan reads more as refinancing than growth capital. For a mid-sized listed company juggling high-cost debentures, swapping expensive debt for cheaper, secured bank lending is the quieter route to a healthier balance sheet — and it hinges on executing the demerger that unlocks the better rate.
Read more: scanx.trade
Image credit: alantankenghoe
