New Delhi: The battle between tech hospitality major OYO and hostel chain Zostel reached another high, as IPO-bound OYO published an open blog in response to a letter by Zostel threatening it to constrain its IPO readiness actions.
The hostel chain has threatened that it “shall be constrained to write to SEBI and/or initiate appropriate proceedings against OYO & OHHPL”.
Zostel has also said that its shareholders are entitled to 7 per cent mirror-image shareholding in the OHHPL (Oyo Hotels and Homes Private Ltd) as per the terms of the scheme of demerger of OYO’s (Oravel Stays Private Ltd) “Indian Business” into the OHHPL — approved by the NCLT Ahmedabad — so any market offer should only follow implementation of this scheme.
While OYO has hit back via its counsel’s statement in an open blog, claiming “The petition filed by Zostel seeks reliefs which are beyond the scope of the Award. The Award does not provide any relief that entitles them to seek to freeze OYO’s shareholding pattern, in any manner whatsoever. As such, till the time that parties do not come to an agreement on the terms of the Definitive Agreements and the same are not executed, no right whatsoever arises in favor of any party for any type of shares to be issued in OYO.”
Zostel has claimed in its letter that it “is astonished to find that OYO is proceeding to make a public offering of shares without complying with the terms of the Award and allotting to the Shareholders the shareholding to which they are entitled”.
In response, OYO has stated in its blog that it “condemns Zostel’s self-serving misrepresentation of case facts and it is an attempt to overreach Delhi HC proceedings. After multiple attempts in the courts and arbitration tribunal, Zostel has continued its efforts to create a wrong perception. This shows a pattern of Zostel trying to distract the company from pursuing its business goals”.