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Oyo to recast biz into 3 units to streamline ops

Oyo Hotels & Homes is restructuring its business into three units — India, international and technology & brand licensing — as it looks to simplify operations and attract different investors. The move comes at a time when the company is seeking to raise funds at a valuation of $10 billion.
The parent company Oravel Stays will transfer the India hotel business, which also includes new areas like co-working and event management, to its subsidiary Alcott Town Planners, according to regulatory filings. All Oravel Stays shareholders will get an equal number of shares in the India unit. Oravel Stays will house the technology business and the brand while holding a stake in Oravel Stays Singapore Pte Ltd, which houses the global business.
The move will give the company “sharper focus” and “better alignment” besides “improve competitiveness”, according to the filing. “Brand ‘Oyo’ is being licensed to group entities and Oravel charges a fee for use of its brand name. Also, the international hotels business has its own growth path with unique requirement. The Indian hotel business also has its own unique and specific requirements, synergies, risks and investor profile,” said the filing.
While the India business, for which the company hired IndiGo’s former president Aditya Ghosh as the CEO, is picking up, the company is still making heavy investments and losses in the global business, especially in China and now in the US. Out of the $1-billion funding Oyo had announced last year $600 million went directly to the Singapore unit, primarily for expansion in China. Last month, Oyo said it would acquire a 100% stake in Amsterdam-based vacation rental company @Leisure Group in an all-cash deal for $415 million. Oyo also said that it has over 5 lakh rooms in China amid local reports of layoffs while committing $300 million to US expansion. At the same time,
Oyo has also seen the entry of Goldman Sachs VC Mark Schwartz into it’s board of directors as a representative of SoftBank after the resignation of Justin Wilson. He also sits on the boards of SoftBank and Paytm.

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