The court gives Oyo until 15 April to submit its claims; Oyo moves NCLAT
The NCLT ordered insolvency process against Oyo Hotels and Homes for an amount of ₹16 lakh
The National Company Law Tribunal (NCLT) has ordered a corporate insolvency resolution process against hospitality unicorn Oyo subsidiary, Oyo Hotels and Homes Pvt. Ltd (OHHPL), for an amount of ₹16 lakh.
In a statement on Wednesday, Oyo said it has filed an appeal, challenging the insolvency order.
The court ordered the insolvency proceedings on 30 March, giving the hotel aggregator until 15 April to submit its claims. “Notice is given that the National Company Law Tribunal has ordered the commencement of a corporate insolvency resolution process of the OYO Hotels and Homes Pvt. Ltd on 30th March 2021 (w.e.f. 01st April 2021). The creditors of M/S. OYO Hotels and Homes Pvt. Ltd, are hereby called upon to submit their claims with proof on or before 15th April, 2021 to the interim resolution professional," read the NLCT order.
Mint has reviewed a copy of the order.
Keyur Jagdishbhai Shah has been appointed as the acting interim resolution professional for the insolvency proceedings.
Oyo founder and chief executive Ritesh Agarwal took to Twitter on Wednesday to clarify that a claimant was seeking ₹16 lakh from Oyo’s subsidiary, leading to a petition at the NCLT.
“Oyo has paid that (amount) under protest and amount (is) already banked by the claimant. Oyo has also appealed with the NCLAT (National Company Law Appellate Tribunal) about the matter. Oyo is recovering from the (covid-19) pandemic steadily and our largest markets are operating profitably," Agarwal tweeted.
In an official comment, an Oyo spokesperson said the dispute of the claimant is not with the named subsidiary in the order, OHHPL.
“We are surprised to hear that Hon’ble NCLT has admitted a petition against OHHPL, a subsidiary of Oyo, for ₹16 lakh in a contractual dispute, which dispute is not even with this subsidiary. We have filed an appeal. The matter is sub-judice, and we would refrain from commenting further on the merits of the matter at this stage. We have strong faith and belief in the judicial system," the spokesperson said.
In the past, the hospitality chain has been involved in several legal brawls.
Earlier this year, an arbitral tribunal ruled in favour of Zostel Hospitality Pvt. Ltd, which owns Zostel Hostels and ZO Rooms, in a legal battle against Oravel Stays Pvt. Ltd, parent of Oyo Rooms, over the execution of term sheets between two parties in 2015.
After the order, Zostel claimed that its shareholders are entitled to 7% shareholding in Oyo, which the latter refuted.
In a recent interaction with Mint, Agarwal said the Oyo’s gross margins, at a group level, have recovered to 100% of pre-covid levels. He added that the monthly bottom line for the company is steadily improving, with its India business being Ebitda positive.
Ebitda stands for earnings before interest, taxes, depreciation, and amortization.
In India, occupancy has returned to 55% to 60% of pre-covid levels, Agarwal added.