Travel aggregator Yatra has terminated its pending merger agreement with US software company Ebix and has sued the company in a Delaware court over breaches of the merger agreement. The suit, filed on June 4, seeks “substantial damages” for Ebix’s alleged breaches of representations, warranties, and covenants in the merger agreement and the extension agreement.

“As detailed in the complaint, Ebix’s conduct breached material terms of the agreements and frustrated Yatra’s ability to close the transaction and obtain the benefit of Yatra’s bargain for Yatra’s stockholders,” Yatra said in the complaint. Yatra is set to hold an investor call this evening and may offer additional details on what went down.

The outside date for completing the merger was extended by a month to June 4, 2020, so that the companies could take more time to determine “whether they could reach mutual agreement on an amendment of certain terms of the Merger Agreement”. Ebix said it “strongly disagrees” with Yatra’s allegations and is considering all options, including filing a countersuit against Yatra on account of multiple breaches of the merger agreement.

Ebix had made a bid to acquire Yatra a year ago and expected the merger to generate an annual revenue of $150 million with a 30% operating margin within six months after acquisition.

Ebix already had a travel portfolio in India, mostly via acquisitions of companies in remittance, travel, and forex  some of which are Zillious Solutions, Leisure Corp, Mercury, and Via. The company has been working on floating an IPO for EbixCash, its India subsidiary, for at least a year. Yatra’s acquisition was a step towards that.

In a business update released the same day it terminated the agreement, Yatra said it outsourced its call-center operations, optimized marketing spend, reduced headcount, and customer promotions in B2C hotels starting 2020. Starting April, it reduced management salaries by 50%, and others by 25-75%. It is currently renegotiating rent and terms with suppliers.