Oyo CEO denies reports of the startup filing for bankruptcy

Ritesh Agarwal, the founder and CEO of Oyo Rooms, has denied reports stating that the Indian budget hotels major has filed for bankruptcy after an unidentified supplier made a claim for US$22,000.

Oyo founder and CEO Ritesh Agarwal / Photo credit: Oyo

In an April 7 Twitter post, the CEO said the circulating text message and document claiming Oyo was seeking bankruptcy protection was “absolutely untrue and inaccurate.” Agarwal also said that the SoftBank-backed company has paid the amount under protest and has challenged the order for the amount.

“Oyo is recovering from the pandemic steadily and our largest markets are operating profitably,” the founder added.

Operating in the tourism industry, Oyo was largely affected by the lockdown measures implemented worldwide due to the Covid-19 pandemic. In May of last year, the startup said it would lay off roughly 5,000 to 25,000 of its workers to cut down on spending.

Oyo’s revenues and occupancy rates dropped by over 50% to 60% during the pandemic, Agarwal revealed in April 2020.

At the end of last year, the CEO shared that Oyo “continued to hold on to close to a billion dollars of cash” and has been getting around 85% of its pre-Covid-19 gross margin dollars.