Will Oyo be forced to give 7% equity to Zostel?
The matter goes back to 2015 when Zo Rooms and Ritesh Agarwal-led Oyo started merger talks. Next year, the deal was called off by Oyo. In 2018, Zo approached the Supreme Court which directed to start the arbitration process
Manu Kaushik | March 16, 2021 | Updated 22:56 IST
Representative Image
Recently, an arbitral tribunal ruled in favour of Zostel Hospitality, a chain of backpackers hostels, in its three-year-old legal battle with SoftBank backed-Oyo Hotels and Homes. Under the deal, Oyo was supposed to acquire Zostel s business. In return, it was expected to give 7 per cent shareholding to Zostel. Zostel claimed that it has transferred its entire business but Oyo refused to transfer shareholding.
Hostel startup Zostel claims victory in 3-year battle, but OYO denies claim
Hostel startup Zostel says it has won against OYO, but the hospitality unicorn has refuted these claims categorically, stating that the Arbitration Tribunal has granted no specific relief to Zostel in terms of receiving ownership in OYO.
0 claps
Share on
Backpacker hostel startup Zostel Hospitality, which was embroiled in a legal battle with OYO for the last three years after merger talks broke down, on Sunday claimed that it had won against Oravel Stays, which owns and operates hotel chain OYO, and was entitled to get a cost from the hospitality unicorn.
»
OYO vs Zo – Zostel claims victory while the Ritesh Agarwal-led firm says there’s still room to win
OYO vs Zo – Zostel claims victory while the Ritesh Agarwal-led firm says there’s still room to win
Sanchita DashMar 8, 2021, 10:30 IST
BI India
Zo Rooms have been in a legal tussle for over three years now.
The dispute was over the merger between OYO and Zo Hostels, where the latter said it was denied its 7% shareholding in Oravel Stays, the parent company of OYO.
The tribunal said that Zo Rooms’ parent
Zostel Hospitality was entitled to claim relief and costs in the case, but acknowledged that definitive agreements weren’t executed.After a three-year long battle, the legal verdict on OYO Hotels and Homes and Zo Hostels is out, but both companies continue to sing their own tunes. The dispute was over the merger between OYO and Zo Hostels, where the latter said it was denied its 7% shareholding in Oravel Stays Pvt. Ltd, the parent company of the Ritesh Agarwal-led
Oravel Stays Pvt Ltd, which runs OYO hotel chain, has said it will vehemently oppose any move to make it execute the definitive agreement for its disputed acquisition of Zostel Hospitality. The statement has come after an arbitration panel allowed Zostal Hospitality to initiate appropriate proceedings to claim 7 per cent stake in Oravel Stays Pvt Ltd for its shareholders under the term sheet of a merger agreement. Zostel Hospitality (ZO Rooms) had taken OYO to the court claiming that it completed its obligation under a merger agreement signed in November 2015 and transferred its business to OYO but the latter failed to transfer 7 per cent stake to its shareholders.