OYO's Singapore arm secures $200M SoftBank loan
OYO's Singapore arm secures $200M SoftBank loan

The National Company Law Tribunal (NCLT) has admitted a petition for initiating insolvency proceedings against Oyo Hotels for recovery of Rs 16 lakh - an order that the lodging and vacation home rental startup has challenged before the appellate tribunal.

Oyo Hotels founder Ritesh Agarwal took to Twitter to refute the company filing for bankruptcy after the supplier's claim.

The NCLT admitted the insolvency petition of an unnamed supplier, who claimed to have not been paid Rs 16 lakh by Oyo, and Ahmedabad-based Keyur Jagdishbhai Shah appointed as the interim resolution professional.

Agarwal tweeted that his company had initially disputed the supplier's claim for Rs 16 lakh but eventually paid "under protest".

"There is a PDF and text message circulating that claims OYO has filed for bankruptcy. This is absolutely untrue and inaccurate. A claimant is seeking INR 16 lakhs (USD 22k) from OYO's subsidiary leading to a petition at NCLT," he tweeted.

Oyo, he said, had "paid that under protest and amount already banked by the claimant".

"OYO has also appealed with the NCLAT about the matter," he said. "OYO is recovering from the pandemic steadily and our largest markets are operating profitably." Even before the pandemic, SoftBank-backed Oyo was struggling to restructure and whittle down loss-making operations. It ended up laying off or furloughing thousands of employees.

In the public notice, the resolution professional asked financial creditors of Oyo Hotels and Homes Private Limited to "submit their claims (of unpaid amounts) with proof" by April 15.

As per the insolvency and bankruptcy law, any creditor can take a company for insolvency over unpaid dues. Once a petition is admitted by the NCLT, a resolution professional or RP is appointed who examines the claims of creditors and supervises the sale of the company to help settle such claims.

Oyo said it has challenged the order against its subsidiary OYO Hotels and Homes Pvt Ltd (OHHPL) in the National Company Law Appellate Tribunal (NCLAT).

"We are surprised to hear that the Hon'ble 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. We have filed an appeal," an Oyo spokesperson said.

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 our judicial system," the spokesperson added.

This is not the first time that a petition has been accepted by the NCLT for a new-age company. In February last year, Flipkart also received such a petition and it was set aside by the NCLAT.

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