Byju News: New York: Foreign lenders to Byju’s $1.2 billion term loan on Thursday said they have filed a petition before the Bengaluru bench of the National Company Law Tribunal (NCLT) to initiate corporate insolvency resolution proceedings against Byju’s parent company Think and Learn Pvt Ltd. Has been filed.
GLAS Trust Company LLC (as the administrative agent and collateral agent of the term loan) has filed a petition under Section 7 of the Insolvency and Bankruptcy Code of India, 2016.
“The myriad of issues facing BYJU’S are entirely self-inflicted,” the Adhoc group said in a statement. For months, we tried to avoid this exact situation, repeatedly attempting to engage constructively with Byju’s management and other stakeholders and provide them with multiple avenues to reach a mutually agreeable solution, even “Even after the Delaware court confirmed the legality of Byju’s default.”
Byju’s had secured a $1.2 billion loan through a term loan facility from a consortium of foreign investors in November 2021.
“We now believe that Byju’s management has no intention or ability to honor its obligations under the term loan,” the group said. “We hope that India’s corporate insolvency resolution process will help stabilize Think and Learn and result in the implementation of a resolution plan that takes into account the interests of all stakeholders,” he said.
According to the term loan lenders, this action was taken after more than 16 months of good faith efforts on the part of the Ad Hoc Group to restructure the term loans which, if successful, would have resulted in the resolution of many of the outstanding loan delinquencies, acceleration and Would have solved it immediately. Ended all open litigation while avoiding further enforcement actions.
In November 2023, the Delaware Chancery Court held that Byju’s has defaulted on its loan obligation and found that the term loan lender is required to replace the sole director of Byju’s Alpha (established in 2021 to receive the proceeds of Byju’s US subsidiary). Were within their contractual rights.
The group claimed, “Byju’s has aggravated its defaults and disregarded its loan obligations following repeated defaults, including refusing to make loan payments required as per any contract and Byju’s Alpha defaulting by $533 million. “Including transferring the loan proceeds to an obscure, nascent hedge fund and then apparently transferring ownership of the funds.”
Byju’s said in a statement shared earlier in the day that the legality of the lender’s actions, including the spike in term loans, “is pending and being challenged in multiple proceedings, including in the New York Supreme Court.”
“Therefore, any action taken by the lenders before the NCLT is premature and baseless,” it said.
Byju said the timing of the lenders’ action coincides with the launch of a rights issue by the company.