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OYO founder Ritesh Agarwal to buy back shares from early investors for $2 billion

OYO founder Ritesh Agarwal to buy back shares from early investors for $2 billion

OYO founder Ritesh Agarwal to buy back shares from early investors for $2 billion
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By CNBC-TV18 Jul 19, 2019 4:11:57 PM IST (Updated)

The fresh investment round will take Ritesh Agarwal's stake in Oyo to around 30 percent from 10 percent, a source familiar with the development said.

Hospitality firm OYO on Friday said its founder Ritesh Agarwal has signed a deal to buy back shares worth $2 billion (nearly Rs 13,770 crore) from early investors through his Cayman islands-registered entity, RA Hospitality Holdings.

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Lightspeed Venture Partners and Sequoia India, OYO's early supporters, are selling part of their holdings in order to help the founder increase his stake while remaining invested significantly in the company's long-term mission, OYO said in a statement.
"Company's founder and CEO Ritesh Agarwal, through RA Hospitality Holdings (Cayman), has signed USD 2 billion primary and secondary management investment round, supported by global institutional banks and his financial partners," it added.
According to sources, after the entire process is completed, Agarwal's stake in the company will rise from the current 9-10 per cent to around 30 per cent. This would take the valuation of the company to around $10 billion.
"As an entrepreneur and on behalf of the company's management, I am thankful to have been given the opportunity to rededicate ourselves to the company's mission of building the world's most loved hospitality brand that is focused on bringing a better lifestyle for the common man," Agarwal said.
Known worldwide for its innovative chic offerings that have impacted hospitality experiences positively, OYO Hotels has attracted some of the world’s leading investors, including Airbnb, SoftBank Vision Fund, Lightspeed Venture Partners, Greenoaks Capital, Sequoia India, and Hero Enterprise.
Japan's SoftBank owns around 45 percent in the company.
As part of these transactions, current investors Lightspeed Venture Partners and Sequoia India are selling portions of their holdings in OYO to help founder and CEO Agarwal increase his stake, the statement added.
Agarwal will fund the buyback through institutional lenders and financial partners, the source said, adding that the round took the company's valuation to $10 billion.
Oyo did not give details on how Agarwal will fund the deal or on his stakeholding.
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