Discover the latest turmoil surrounding ed tech titan Byju’s as a US loan agency launches yet another insolvency plea against the company. Get the inside scoop on this ongoing saga and find out what it means for the future of one of India’s biggest educational technology firms.
Insolvency Plea Against Byju’s
On February 21, Glas Trust Company LLC, a US-based non-bank loan agency, took a significant step by registering an insolvency plea against the renowned ed tech giant, Byju’s, at the National Company Law Tribunal (NCLT) in Bengaluru.
Glas Trust Company LLC acts as the administrative agent for the lenders and collateral agent for secured parties. It represents foreign lenders who collectively provided over 85 percent of Byju’s $1.2-billion term loan.
Interestingly, this marks the fourth insolvency plea filed against the ed-tech company in less than six months. Although the plea was originally filed on January 22, it officially entered the NCLT’s records on February 21.
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Byju’s Response
In response to these legal actions, the ed-tech giant has strongly contested the allegations. The company emphasized that any proceedings brought forth by lenders before the NCLT are premature and unfounded. Byju’s reiterated that the validity of the lenders’ actions, including the acceleration of the term loan, is currently under dispute in various legal proceedings, including before the New York Supreme Court.
Moreover, Byju’s pointed out the suspicious timing of the lenders’ actions, noting that they coincide with the commencement of a rights issue by the company. Byju’s founder and CEO, Byju Raveendran, highlighted in a shareholder letter that the company’s rights issue to raise $200 million at a substantially reduced valuation has been fully subscribed.
Other Insolvency Petitions
Apart from Glas Trust Company LLC, other entities have also filed insolvency pleas against Byju’s. These include the Board of Control for Cricket in India (BCCI), France-based Teleperformance Business Services, and digital marketing firm Surfer Technologies.
The NCLT has issued notices for all insolvency petitions against Byju’s. BCCI’s petition had its initial hearing in November 2023, while the hearings for the other petitions took place in February 2024. BCCI claims that Byju’s owes them over Rs 150 crore, while Surfer Technologies and Teleperformance Business Services claim amounts of Rs 4 crore and Rs 2.3 crore, respectively.
The upcoming schedule for these cases involves BCCI’s plea set for a hearing on February 28, while Surfer Technologies’ and Teleperformance Business Services’ petitions are expected to be heard in March 2024.
Bhaarat Bulletin’s Shikha Rai, Bimal Dev, and Moneycontrol have contributed to the above report
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