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Oyo Quashes Bankruptcy Rumors after NCLT accepts Petition against its Subsidiary

Budget hotel room major Oyo Rooms has categorically rejected Bankruptcy rumors, which began to spread after NCLT accepted insolvency petition against one of Oyo’s subsidiaries. For all those who are not aware, NCLT on Wednesday accepted insolvency petition against Oyo subsidiary Oyo Hotels and Homes Pvt Ltd.

Oyo)Rooms_budget_hotel

The petition has been filed by Hyderabad based creditor who is seeking Rs 16 lakh compensation from Oyo’s subsidiary as part of the unpaid dues.

According to reports, the concerned petitioner is the owner of The Conclave Hotel, which was once managed by Oyo Rooms.

In the official statement, Oyo rooms expressed surprise over NCLT’s decision to accept insolvency proceedings against its subsidiary firm.

Oyo’s Official statement:  

“We are surprised to hear that the honorable has admitted a petition against OHHPL, a subsidiary of  Oyo for Rs 16 Lakh in 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 matter at this stage”

The SoftBank based company also claimed that the petitioner has already been paid Rs 16 Lakh. However, to prove this claim, Oyo will have to submit the proof by April 15 to NCLT.

The Gurugram headquartered company also cited the example of Flipkart, arguing that last year Walmart backed company was facing a similar matter but the matter was later set aside by NCLT.

Ritesh Agarwal’s tweet on the matter…  

Oyo’s business is currently going through its worst crisis, with pandemic taking a huge toll on the hospitality industry.  The industry has been among the worst hit as the growing fear of coronavirus has casted a shadow panic among travelers. And with the trend of lockdown once again reemerging, Oyo and rest of the other budget hotel players may have to brace for more tough times.

 

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