OYO blames Zo Rooms for 'forum hunting' after Zostel's latest plea to restrain its IPO

The hotel and hospitality major has found itself in the middle of another legal battle before it takes a big step ahead

OYO, the hotel and hospitality giant is reportedly all set to make a big step this week, by filing the preliminary paperwork for its coming initial public offering (IPO).
 
However, the hotel and hospitality major has found itself in the middle of another legal battle before it takes a big step ahead.
 
Hotel rooms gatherer Zo Rooms, that  is managed by Zostel Hospitality, has moved a new plea to the Delhi High Court in order to hold back OYO from modifying its shareholding pattern.
 
The hostel chain plea has been filed to stop the OYO from raising any more capital and eventually put a stop on its public issue.
 
Zo Rooms’ legal counsel TMT Law Practice said, in an interview with The Economic Times, "An issuer shall not be eligible to make an initial public offer if there are any outstanding convertible securities or any other right, which would entitle any person with any option to receive equity shares of the issuer...”
 
They added that hotel and hospitality major should not be allowed to file draft red herring prospectus (DRHP) until this matter is resolved.
 
According to The Economic Times report OYO may postpone its DRHP by a week.
 
The Delhi HC on September 29
adjourned the hearing in the OYO and Zo Rooms case to October 7.
 
The high court has also asked ZO Rooms to submit a rejoinder on the record.
 
Amit Sibal was appearing on behalf of Zo Rooms, and has requested that their equities should be preserved till next hearing date.
 
Sibal added that Zo Rooms intention was not to restrict OYO's IPO.
 
Sibal said, "Now if they go ahead and conduct the initial public offering then these shares will be no longer available for allotment to me in that eventuality."
 
Sibal added that if OYO do not succeed in their objections to the award then at least his ability to have those shares is preserved.
 
The court firmly denied it, saying that this could not be done without hearing the "contested matter".
 

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