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Ad-for-equity investor BCCL exits Yatra

05 July, 2017

Media conglomerate Bennett, Coleman and Co. Ltd (BCCL) has sold its equity-convertible warrants in Yatra Online, Inc. for Rs 39 crore (around $6 million), the online travel portal said in its annual report for FY17.

Yatra had issued the warrants to BCCL in 2011 for a period of four years. It later extended the term till September 2017. The travel portal settled the payment to BCCL under the terms of the advertisement agreement, the report shows.

“This was structured like a commercial advertising deal, which is why the returns are not like [those] from an equity investment. It was a deal struck in 2011 where payout was linked to the public listing process, which is why we decided to pay the amount for ads utilised in the past six years. Some part of it was cash at that time, and the rest was credit line that ultimately got paid now,” said Alok Vaish, group CFO, Yatra.

Email queries sent to BCCL didn’t elicit a response.

For the financial year ended 31 March 2017, Yatra’s revenue rose to Rs 939.3 crore from Rs 837.8 crore in the year-ago period. However, losses widened 377% to Rs 593.7 crore from Rs 124.3 crore.

“A large portion of this loss is exceptional item loss. It is a one-time loss taken as part of the going public process…If you skip that, our losses will be similar to that of last year,” Vaish explained.

The company also said in the annual report that it was in need of more funds to invest in new technologies and stay relevant. It only has a 12-month operational runway in terms of cash and cash equivalents.

“We may need to raise additional funds, and we may not be able to obtain additional debt or equity financing on favourable terms, if at all. If we raise additional equity financing, our shareholders may experience significant dilution. If we engage in debt financing, we may be required to accept terms that restrict our ability to incur additional indebtedness. In addition, the availability of funds depends in significant measure on capital markets and liquidity factors over which we exert no control,” the annual report read.

However, Vaish said the company had enough funds for the next couple of years.

Yatra also said it will continue with its inorganic growth strategy. In 2015, it had acqui-hired Bangalore-based Dudegenie, a WhatsApp-based concierge service in a publicly-undisclosed deal.

Founded in 2006 by former Ebookers Group (UK) executives Dhruv Shringi, Manish Amin (CIO) and Sabina Chopra (EVP – operations), Yatra is backed by a string of venture capital, private equity, and strategic investors.

In October last year, it issued a small equity stake to Reliance Industries Ltd as part of a business arrangement. The proposed deal is linked to an existing partnership where Reliance pre-installed the Yatra mobile app in its Lyf-branded 4G handsets.

In July 2016, Yatra had formed a reverse-merger agreement with US-based special purpose acquisition company Terrapin 3 Acquisition Corp (TRTL), which is listed on the Nasdaq, paving the way for a back-door listing of the second Indian OTA in the US.

Five months later, Yatra announced that it had completed the transaction with TRTL, which will result in the latter becoming a partially-owned subsidiary of Yatra. The combined entity’s stock listed on the Nasdaq under the ticker symbol ‘YTRA’.

In January this year, BCCL had invested Rs 60 crore ($8.8 million) in Ahmedabad-based e-tailer Infibeam Corporation Ltd in exchange for equity.

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Ad-for-equity investor BCCL exits Yatra

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