After WeWork, OYO is another rude shock for SoftBank's Son

The Ritesh Agarwal-backed company, once touted by Son to overtake the biggest hotel chains, has frozen operations across the world.

Moneycontrol News

April 14, 2020 / 21:11 IST

In less than a year after the WeWork fiasco, Masayoshi Son, the CEO of Japanese conglomerate SoftBank, is now staring at another troubled startup – the Indian hospitality firm OYO.

The firm has been forced to freeze operations around the world and has been furloughing thousands of employees, media reports have said. Travel has come to a halt, leaving hotel rooms empty and losses rising for the nascent company.Follow our LIVE coverage of PM Modi's address here

The Ritesh Agarwal-backed company, once touted by Son to overtake the biggest hotel chains in the world, is now facing an existential crisis in the wake of the coronavirus pandemic.

In a highly unusual move, Agarwal borrowed $2 billion to buy shares of OYO as the valuation soared, with a personal guarantee to financial institutions from Son.

Amid OYO's dismal operations, Son's $2 billion promise could be in jeopardy as banks may call for more collateral if the hotel chain’s valuation drops any further. This could result in personal losses to both Son and Agarwal.

COVID-19 Vaccine

Frequently Asked Questions

How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

Show