The interim resolution/insolvency professional (IRP), appointed by the National Company Law Tribunal (NCLT), has called for expression of interest (EOI) for submission of resolution plans for hotel and homestay aggregator Stayzilla.
After Supreme Court dismissal on plea against insolvency order, this is the first step taken by IRP for initial plans from bidders to revive the trouble-hit company.
According to the notice for EOI, the applicants should have a net worth of Rs 50 crore or more as of March 31, 2018, and the ability to infuse a minimum of Rs 20 crore cash in the company.
Notably, Stayzilla is estimated to have a debt of Rs 13 crore which includes owing to financial creditors.
During the insolvency proceedings ordered by NCLT, Chennai, a 270-day timeframe was given for finding resolution plan for the company. The resolution period for Inasra Technologies which runs Stayzilla ends on July 30, 2018.
The order further added that, if no resolution plan is arrived at, the company goes into liquidation post the end of the 270 period. Karthigeyan Srinivasan, the insolvency professional has now invited expression of interest for submission of resolution plans for Stayzilla by May 16.
Meanwhile, Yogendra Vasupal, CEO, and co-founder of Stayzilla said that he will start reaching out to investors and other potential bidders to bid for the asset aggressively.
Importantly, it is only an aggregator which may not have physical assets of any worth other than intellectual property. So the valuation of the company will be an interesting part of the resolution.
For uninitiated, Stayzilla was in business for over 12 years and had raised about $33 million from the likes of Matrix Partners and Nexus Venture Partners. In an online post in 2017, Vasupal announced the shutdown, citing lack of network effect, inability to expand quickly, high costs and low revenue.
Soon after, based on a complaint from JigSaw Solution–an advertisement agency, Vasupal was arrested by the police over unpaid dues of Rs 1.72 crore for which Jigsaw initiated criminal proceedings. However, Vasupal got bail from Madras High Court after a month on April 11, while cofounder Sachit Singhi got anticipatory bail.
Vasupal had then challenged the insolvency proceedings ordered by NCLT, but it was dismissed by the Supreme Court in March, this year.
The development was first reported by The Hindu.