Oyo Hotels & Home founder Ritesh Agarwal plans to repurchase shares from early investors Sequoia Capital and Lightspeed Venture Partners. This is in an apparent bid to hike his stake in the hospitality firm, according to media reports.
Through the share repurchase move, Agarwal will buy shares from Sequoia Capital and Lightspeed Venture Partners worth $1.5 billion, reported The Economic Times.
It will help the 26-year-old increase his stake in Oyo to about 30 percent from the current 10 percent, said the report adding that he is in talks with financial institutions and banks in India, Japan, and Europe to shore up $2 billion in secured debt.
Meanwhile, in another development, the hospitality chain is recasting its business into three units—India, international and technology & brand licensing, according to The Times of India.
According to regulatory filings, the parent company Oravel Stays will transfer the India hotel business to its arm Alcott Town Planners, and will hold technology business and the brand while holding a stake in Oravel Stays Singapore Pte Ltd, which houses the global business, the report said.
In May this year, Oyo said it became the second-largest hotel group in China within 18 months of its foray into the country, with presence in 320 cities and nearly 10,000 Oyo-branded hotels with 4,50,000 rooms, according to a PTI report.
With second-tier cities at its core, Oyo Hotels' chain extended deep into China's tier-2 to tier-6 cities, the company said in a statement.
In early May this year, Oyo had agreed to acquire Amsterdam-based vacation rental company @Leisure Group from Axel Springer for an estimated $415 million (over Rs 2,885 crore), reported PTI. @Leisure Group is a leading vacation rental company in Europe and manages holiday homes, holiday parks, and holiday apartments.
The acquisition would help Oyo move a step closer in realising its vision of becoming a global real estate brand while maintaining leadership in the hospitality industry, Oyo had then said in a statement.
According to sources in the know of the matter, the acquisition cost was $415 million (around Rs 2,885 crore).
In April this year, Oyo had said it created over a lakh direct and indirect jobs in India and was aiming to double the number by 2020.
Oyo India and South Asia chief executive officer Aditya Ghosh said that over half of the 1 lakh jobs created by it were in smaller towns and cities of India.
In March this year, the hospitality firm had said that it would invest Rs 1,400 crore in India and Nepal markets this year as part of efforts to increase infrastructure, strengthen technology and internal capability.
The investment of Rs 1,400 crore will go in capex, technology and leadership, Ghosh had said then.
The idea is to further deepen and widen its presence across India while focusing on aggressive capacity building to bring the choice of an Oyo hotel to every corner of the country, he added.
In February this year, OYO had entered into a joint venture (JV) with Yahoo Japan Corporation to make a foray into the housing rental market in Japan, targeting the young population.
Through the JV, named as Oyo Technology & Hospitality Company, Japan, Oyo would bring its housing rental product from India—OYO Living—rechristened as Oyo LIFE to Japan from March 2019, Oyo said in a statement.
Updated Date: Jul 08, 2019 17:22:06 IST