Airbnb Inc. has requested banks to increase the deadline of a $1 billion credit score facility it was granted in 2016, based on a Reuters report Wednesday.
The homestay-marketplace startup has $three billion in money however is seeing elevated monetary pressure as a result of novel coronavirus (COVID-19) pandemic, an individual near the matter advised Reuters.
J.P. Morgan Chase & Co. (NYSE: JPM), Citigroup Inc. (NYSE: C), Financial institution of America Corp. (NYSE: BAC) and Morgan Stanley (NYSE: MS) collectively gave the $1 billion debt line to Airbnb in 2016.
In keeping with the Reuters supply, Airbnb has by no means used the credit score facility, and it would not expire for an additional yr, however the firm desires to spice up its money holdings to maintain the affect of the pandemic.
The corporate additionally reportedly advised the banks that it expects to recoup 2019 reserving ranges by early 2021. It identified that, a minimum of in the USA, the hosts on its platforms will profit from a deliberate $2 trillion financial stimulus, Reuters famous.
The supply advised Reuters that Airbnb had been money optimistic for 4 straight years till 2019. The corporate had recommended final September that it might lastly go public in 2020, but it surely’s not clear if it would comply with by on the plan given the pandemic.
The San Francisco-based firm can be receiving funding inquiries through the pandemic, with provides ranging between $100 million to $1 billion, the individual advised Reuters, however it’s at the moment solely “listening” to the provides.
Why It Issues
The whole journey and hospitality sector has been affected by the COVID-19 outbreak globally, with governments imposing widespread lockdowns and banning non-essential worldwide journey.
Airbnb has been providing full refunds for bookings made earlier than March 15 on its platform, which have a check-in date earlier than April 14.
The Airbnb hosts are going through broad losses on account of mounting cancellations or lack of recent bookings.
CNBC reported Wednesday that the hosts are scrambling to different platforms for long-term bookings, together with marketplaces like these operated by Fb Inc. (NASDAQ: FB) and Craigslist, because the demand for short-term lodging has fallen flat.
Picture Credit score: Public area photograph by way of Wikimedia.
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