Exclusive: OYO converts JV with SoftBank’s SB Topaz into subsidiary to simplify corporate structure

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May 13, 2021 6:16 PM

In September 2019, OYO had set up two JVs with SB Topaz -- Mountainia Developers and Hospitality Pvt Ltd and MyPreferred Transformation and Hospitality Pvt Ltd. While Mountainia Developers was set up to purchase real estate for hotels, MyPreferred Transformation was setup for repair and refurbishment work at OYO hotels in India and South Asia.

OYO currently works with over 1 lakh small hotel and home business entrepreneurs with 99 per cent of its hotels and homes following a revenue-sharing model. (Bloomberg/File)

Oravel Stays Private Limited, which owns hospitality unicorn OYO, has converted its joint venture with SoftBank’s Cayman Islands-registered entity SB Topaz (Cayman) Limited — Mypreferred Transformation and Hospitality Private Limited — into its subsidiary by acquiring their stake, sources aware of the development told Financial Express Online. As part of the move, Hiroki Kimoto and Saurabh Jalan of SB Topaz (Cayman) Limited have tendered their resignation as directors of Mypreferred Transformation and Hospitality Private Limited, according to the regulatory filing. OYO’s General Counsel Rakesh Prusti and Global Chief Commercial Officer Anuj Tejpal will continue to hold their position as directors of Mypreferred Transformation and Hospitality.

The move comes after OYO has converted its joint venture with SB Topaz (Cayman) Limited into an OYO subsidiary, sources added even as the company looks to simplify its corporate structure and governance. According to earlier regulatory filings in September 2019, OYO had set up two JVs with SB Topaz — Mountainia Developers and Hospitality Pvt Ltd and MyPreferred Transformation and Hospitality Pvt Ltd. While Mountainia Developers was set up to purchase real estate for hotels, MyPreferred Transformation was setup for repair and refurbishment work at OYO hotels in India and South Asia.

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Even as the company has faced growth challenges, as the hospitality industry has been the most impacted amid the pandemic, it had announced multiple changes to its global leadership in January this year. OYO had appointed Ankit Mathuria as the new Chief Technology Officer, Gautam Swaroop to lead as CEO for OYO International. The company had promoted its multiple C-suite talents for global business such as chief business development officer Ayush Mathur to take up as global chief supply officer. Global COO Abhinav Sinha was made the interim chief product officer as well while chief growth officer Kavikrut had to jointly lead global communications.

In an internal email to employees in March this year, OYO founder and Group CEO Ritesh Agarwal had said that the company is now EBITDA positive and that its gross profits globally, since January 2021, had achieved the pre-COVID level. “We are seeing signs of recovery across India, Europe, and Southeast Asia,” Agarwal had said in the email. He noted that the company has been recategorised into three geographies including OYO INSEA covering India, Indonesia, Malaysia, and the Philippines; OYO Europe, and OYO International covering the US, UK, China, etc. OYO currently works with over 1 lakh small hotel and home business entrepreneurs with 99 per cent of its hotels and homes following a revenue-sharing model where the capital expenditure is borne by the owners and operators themselves.

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