Yatra’s Subsidiary Faces Insolvency Proceedings

Online travel aggregator (OTA) Yatra’s subsidiary, TSI Yatra, is facing insolvency proceedings. 

In an exchange filing, the travel tech company said that Ezeego Travels & Tours Ltd, which is currently under liquidation, filed a petition with the National Company Law Tribunal (NCLT) for initiating corporate insolvency resolution against TSI Yatra. 

Following this, the Delhi bench of the NCLT admitted the petition filed by Ezeego, which is an operational creditor of the OTA’s subsidiary, on October 15. 

Yatra said TSI Yatra will take legal recourse to seek “appropriate relief” in connection with the case, including filing an appeal before the National Company Law Appellate Tribunal (NCLAT) or “such higher authorities”.

In the filing, Yatra said that TSI Yatra entered into a “certain agreement” with Ezeego to provide a discount on the invoices raised by the former. The OTA added that Ezeego has claimed alleged unpaid dues to the tune of INR 21.97 Cr from TSI Yatra, including INR 14.86 Cr as principal outstanding and INR 7.1 Cr in interest. 

“TSI sought dismissal of the claim before the NCLT primarily on the grounds that alleged claim is a subject matter of reconciliation and that the date of default falls in the period of section 10A of the IBC,” added Yatra.

The company said that the impact of the proceedings on it cannot be quantified currently. “TSI is a separate legal entity, however, since it is a material wholly owned subsidiary of the company (Yatra) to that extent there could be an impact on the Company as TSI gets consolidated into the Company. The impact is not quantifiable at this juncture,” the filing said. 

The company added that TSI Yatra believes it has “strong legal grounds” to represent the matter before the NCLAT, adding that it is “progressively working towards preferring an appeal”.

The latest trouble comes at a time when the travel tech major’s stock has been on a downward spiral. Shares of Yatra hit an all-time low of INR 119.50 during the intraday trading on October 8. 

On the financial front, Yatra’s net profit declined 32.5% to INR 4.04 Cr in the first quarter (Q1) of the fiscal year 2024-25 (FY25) from INR 5.99 Cr in the year-ago quarter. Operating revenue fell 8.5% to INR 100.80 Cr during the quarter under review from INR 110.2 Cr in Q1 FY24. 

Shares of Yatra closed today’s trading session 1.39% higher at INR 123.85 on the BSE.

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