Oyo, a SoftBank-backed Indian budget hotel chain, has dismissed the news reports that it has filed for bankruptcy after the fallout of a contractual dispute over a claim of US$22,000.
Ritesh Agarwal, founder and CEO of Ayo, stated in a Twitter post dated April 7 that the text messages and documents carrying these claims are “absolutely untrue and inaccurate”
He noted the company has paid the disputed amount and has challenged the claim.
Similar to its counterparts in the tourism industry, Oyo has been hit by the lockdown measures implemented by various countries. Agarwal disclosed in April last year the hotel chain saw its revenues and occupancy rates drop by up to 60 per cent during the height of the pandemic.
However, it seems Oyo is not letting the pandemic headwinds affect them. Last month, its Singapore unit secured a US$204 million loan facility from SB Investment Holdings (UK), a unit of SoftBank. This move is aimed at bolstering Oyo’s operations, which have been hit hard by the COVID-19 pandemic.
Several reports have also noted the company has managed to sustain its gross margin to 100 per cent of pre-COVID-19 levels.
Image Credit: Oyo
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