Synopsis: “ZUL was not a material subsidiary of the company (Zomato) and didn’t have any business activity and the dissolution of ZUL will not affect the turnover/revenue of the company.” Zomato said
Zomato had previously listed at a 52 per cent premium at ₹ 115 on stock exchanges on July 23. Zomato, India’s largest meal delivery service, has announced that Zomato USA LLC (ZUL), its step-down subsidiary in the United States, has been liquidated and wound up.
“ZUL (Zomato USA LLC) was not a material subsidiary of the company (Zomato) and didn’t have any business activity and the dissolution of ZUL will not affect the turnover/revenue of the company.” In a regulatory statement to the stock exchanges, Zomato stated.
A subsidiary of a subsidiary is referred to as a step-down subsidiary firm. For example, if A is the holding firm, B is A’s subsidiary, and C is B’s subsidiary, C is A’s step-down subsidiary.
Zomato said it got a notice on August 18 of the dissolution and winding up of Zomato USA LLC, which will take effect on August 17, 2021.
Zomato has made a sensational premiere on Dalal Street on July 23. The shares opened at a 52 per cent premium at ₹ 115 on the stock exchanges and concluded 65 per cent higher at ₹ 125 on their first day.
Zomato shares were up 0.7 per cent at ₹ 137.40 on the BSE at 12:30 p.m., compared to a 0.34 per cent decrease in the benchmark indices.
Because of the second wave of the pandemic and isolated lockdowns, the dining-out industry fell in the June quarter, as projected. According to Zomato, the dining-out segment’s revenues are decreasing sequentially.
At the same time, Zomato said that losses at Hyper pure increased in the June quarter as a result of investments in the company’s expansion.
Zomato’s operating results were not particularly impressive, with adjusted earnings before interest, taxes, depreciation, and amortization rising to about Rs. 170 crore from Rs. 120 crore the previous quarter.
“This divergence in reported profit/loss and adjusted EBITDA will continue going forward,” Zomato said.
