These details have emerged from a mandatory filing Oyo has made with the statutory authority concerned.

Oyo to reorganise business into 3 units to streamline operations
Atom Business Monday, July 08, 2019 - 13:51
Written by  S. Mahadevan

Oyo Hotels & Homes has been through many changes from the time it was recognized simply as Oyo Rooms. The company has now decided to reorganize itself into three distinct entities. The Indian operations are all being clubbed into one company; the international foray with its own challenges and nature of operations will be the second unit; and then the technology and brand related activities will be managed by the third company.

Alcott Town Planners will be the company to which all the Indian business dealings Oyo has will be responsible for. These include some of the verticals added to the main hospitality business, co-working and event management activities. The parent company Oravel Stays will be the owner of the Oyo brand and will assume full responsibility for the technology functions across all verticals. The shareholders of Oravel Stays will now receive one share of Alcott Town Planners for every share held in Oravel at par value.

Oravel Stays Singapore Pte Ltd, the Singapore-registered company will look after the international business of Oyo, which mainly consists of China and now the USA.

All these details have emerged from a mandatory filing Oyo has made with the statutory authority concerned. The company has recorded its own explanations/justification for the various changes in the companies Oyo is making now. The major line taken is that the Indian and international operations require different perspectives to the day to day management of the business and that is why this split is being necessitated. As far as the third entity is concerned, the idea is to fix the ownership of the Oyo brand and the parent company will charge a fee from the other group entities for use of the brand name. Oyo has thus found another revenue stream which may be welcomed by the investors.

As reported in these columns earlier, Oyo is trying to raise fresh funding, riding on a new valuation of $10 billion. Reports say the company’s international operations are not panning out as envisaged, with the company claiming it has under its control, 500,000 rooms in China, and local industry sources claiming the company is into layoffs of personnel.

In other news, Oyo is aiming to add to its group, the @Leisure Group, a vacation rental company based out of Amsterdam. It would mean coughing up $415 million for this all-cash deal. The expansion of operations in the US requires a fund infusion of another $300 million. The fund-raising exercise could be of the order of $1 billion again.

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