oyo latest news: Oyo squashes rumours of bankruptcy following an NCLT order
SoftBank-backed Oyo Hotels & Homes scotched speculation on social media platforms over bankruptcy proceedings, which…
“There is a pdf and text message circulating that Oyo has filed for bankruptcy. This is absolutely untrue and inaccurate. A claimant is seeking Rs 16 lakh from Oyo’s subsidiary leading to a petition at NCLT,” Oyo’s founder Ritesh Agarwal tweeted on Wednesday.
The NCLT order has been passed against Oyo Hotels and Homes (OHHPL) a subsidiary of Oravel Stays, the parent company of Oyo.
An NCLT bench in Ahmedabad has ordered the commencement of a corporate insolvency resolution process of OHHPL based on an application filed by an operational creditor over non payment of dues amounting to Rs 16 lakh.
The corporate insolvency resolution process (CIRP) was initiated under the Insolvency and Bankruptcy Code (IBC).
“The order has been passed based on an application filed by an operational creditor. An amount of Rs 16 lakh is outstanding,” said Keyur Jagdishbhai Shah, who signed the NCLT order. “The order reserved was pronounced on April 1. Based on the merits of the case, the NCLT bench decided that Oyo didn’t pay the dues. So as per IBC, CIRP was ordered,” Shah told ET.
As per the order, the creditors of Oyo Hotels & Homes have been called upon to submit their claims before April 15 to the interim resolution professional.
Agarwal said in his tweets that Oyo had approached the NCLAT against the order.
“Oyo has paid that under protest and the amount is already banked by the claimant. Oyo has also appealed with the NCLAT about the matter. Oyo is recovering from the pandemic steadily and our largest markets are operating profitably,” Agarwal said in his tweets.
In a response to ET’s queries, Oyo said the matter pertains to a reconciliation issue and is actually a commercial dispute.
“We are surprised to hear that the honorable NCLT has admitted a petition against OHHPL, a subsidiary of Oyo for Rs 16 lakh in a contractual dispute, which dispute is not even with this subsidiary,” an Oyo spokesperson said and added: “Oyo is on a steady path of resurgence in 2021. We are seeing signs of recovery across geographies and our balance sheet is well-funded with our largest markets operating profitably.”
The spokesperson further said Oyo’ s global business is earning the same gross profits dollars since January this year as it did pre-Covid in January 2020. “Our survival through the Covid crisis and resurgence clearly indicate that we are a company with strong fundamentals and high-value potential,” the spokesperson added.