A group of lenders have dragged troubled edtech firm BYJU’s to bankruptcy court, saying the company’s actions forced them to adopt the course of action.
BYJU’s, a once-storied startup valued at $22 billion during the pandemic, found itself in financial troubles after online learning receded and its cash flows dried up and valuation sunk.
“The myriad issues facing BYJU’s are entirely self-inflicted. For months, we sought to avoid this exact situation, repeatedly attempting to engage constructively with BYJU’s management and other stakeholders and providing them with multiple paths to reach a mutually agreeable resolution,” the group of lenders said in a statement.
“It is our belief now that BYJU’s management has no intention or ability of honoring its obligations under the Term Loans,” the lenders said, adding that they hope insolvency proceedings in India’s National Company Law Tribunal “will help stabilize Think & Learn (parent firm of BYJU’s) and result in implementing a resolution plan that accounts for the interests of all stakeholders.”
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BYJU’s defaulted on a $1.2 billion loan obligation in November 2022, a charge upheld by a Delaware court which lenders had previously approached.
“This action was taken following over 16 months of good faith efforts on behalf of the Ad Hoc Group to restructure the term loans, which, if successful, would have immediately solved for the loan’s numerous outstanding defaults, acceleration, and ended all open litigation while avoiding further enforcement actions,” the lenders said.
In their statement, the lenders listed a number of actions allegedly taken by BYJU’s, which they said amounted to the company disregarding its loan obligations. These include:
In November 2023, the Delaware Chancery Court had held that the lenders were within their contractual rights to replace the sole director of BYJU’s Alpha.
BYJU’s is yet to issue a statement in response to the latest action by its lenders. This article will be updated if the company issues a statement.
First Published: Jan 26, 2024 12:32 PM IST
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