Online travel company Yatra has announced on Friday that it has terminated a pending merger agreement with US-based software firm Ebix Inc and had filed a litigation seeking “substantial” damages for Ebix’s alleged breach of deal terms.
Last year in July, Ebix had agreed to buy Yatra for an enterprise value of $337.8 million, aiming to beef up its portfolio of Indian travel companies, including Mumbai-based Mercury Travels and Delhi-based Leisure Corp. However, according to a media report, it seems Ebix has now backed out of the agreement.
The termination of the deal has come at a time when travel and hospitality segments have seen no business in the past three months. Things are not going to change drastically and would take many months from here to regain the pre-COVID-19 scale.
The Gurugram-based OTA also said that it was seeking damages against Ebix for alleged breach of contract including clauses on representations and covenants. Ebix did not bring any immediate respond to this development.
Even though the exact reason for Ebix backing out of the merger deals is not revealed, the impact of the Covid-19 pandemic on the travel industry could be the possibility.
Leaving of Ebix from the deal may trigger huge problems for Yatra. As the move could enforce to downscale operations and team significantly. The company has already cut salaries of senior executives and said no to hikes in remuneration.
