Sabre’s chief commercial officer Roshan Mendis has become an independent director, which seems enough to settle a dispute that could have derailed Yatra's plan to go public.
It’s been six months since Maguire Investment Trust published an open letter calling for an operational overhaul at Yatra, India’s largest corporate travel agency. Now it’s had at least one of its key demands met.
Yatra this week said it had appointed Roshan Mendis, Sabre’s chief commercial officer, to its board as an independent director. Sabre is also in the process of investing in American Express Global Business Travel, as it prepares to go public by merging with a blank-check company backed by asset manager Apollo.
Yatra also entered into a cooperation agreement with Maguire, which owns 7.4 percent of the company, where the Australian investment firm will “abide by certain customary standstill and voting provisions for a period of 18 months from the date of signing of the agreement.”
In the letter, Maguire also said there was “an extremely shareholder-unfriendly corporate governance profile and a lack of transparency in its executive compensation packages” at Yatra.
As Mendis joins, out goes Sean Aggarwal, who has stepped down from the board “due to other pressing commitments.” Aggarwal, who is also chair of the board of directors at mobility app Lyft, had been a member of Yatra’s board since March 2018. “His retirement is not the result of any disagreement with the company or any of its affiliates on any matter relating to the company’s operations, policies or practices,” Yatra said in a statement.
Adding Mendis to the management team is a positive step forward, said Gaurav Sundaram, president of India-based ProKonsul Consulting, and signals a resolution of potential conflict with Maguire.
“The failed Ebix acquisition has dented confidence, and for Yatra to succeed in the post-Covid world it will need additional management resources that can leverage the complexities and opportunities of the e-commerce and business travel domains,” said Sundaram. “Such additions will allow Yatra to quickly increment growth and cross-selling synergies inherent in its business model.”
Maguire’s July 2021 letter expressed serious concerns with the company’s corporate governance and executive compensation practices. “We have already suggested one extremely capable candidate who the board failed to even offer an interview, let alone legitimately consider appointing to the board,” Timothy Maguire wrote. “We believe a change in tone at the top is essential and the board should immediately solicit shareholder recommendations for highly qualified director candidates to be named as nominees for election at an annual general meeting of shareholders scheduled for 2021.”
Also in July, Maguire said he wanted to drive Yatra’s stock price on the Nasdaq stock exchange to at least $6 per share in 2022, and achieve $100 million in sales. It’s currently trading at $1.84. Yatra meanwhile plans to take the company public in India in the first half of this year. Similar to RateGain Travel Technologies, which made its stock market debut in India in December, it will use the proceeds to acquire other local companies and strengthen its balance sheet.
However Yatra, which is India’s biggest corporate travel agency, posted a $1.9 million loss for its 2022 second quarter, which covers the three months ended Sept. 30, 2021. It is also now turning its focus to the cargo sector, and aims to generate $4 million to $5 million in freight-forwarding revenue this year.
Taiwan’s Fuh Hwa Securities Investment Trust Co., Ltd. has taken a 4 percent stake in Yatra, according to Jan. 14 SEC filing.
“I look forward to working with Roshan and the other directors on our board, as we continue advancing our multi-channel strategy and deliver results for shareholders,” said Yatra CEO Dhruv Shringi. “Amidst ongoing industry disruption and evolving consumer trends, we believe we are poised to capitalize on the accelerated shift by consumers to booking travel online and well positioned to deliver on growth and profitability post the pandemic.”
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Photo credit: Indian online travel agency has appointed Roshan Mendis, Sabre’s chief commercial officer, to its board as an independent director. Artur Tumasjan / Unsplash