The group of lenders that gave a $1.4 billion term-loan to Byju's Alpha filed a petition against Neuron Fuel Inc., Epic! Creations Inc. and Tangible Play Inc. has been asked to initiate involuntary proceedings against them in a Delaware court under Chapter 11 of the US Bankruptcy Code.
The lenders said in a statement that since Byju's began defaulting on its term-loan obligations (on a $1.2 billion loan), "we have worked productively and collaboratively to help Byju's cure its multiple defaults." Every possible effort has been made to work from”.
“However, it is clear that the management of BYJU's has no intention or ability to honor its obligations under the term loan. Indeed, BYJU's founder, who also serves as one of the three directors of the overall enterprise – BYJU Raveendran , Riju Ravindran and Divya Gokulnath – the creditors alleged, "$533 million of loan funds were illegally diverted, the whereabouts of which are still unknown."
The edtech company had previously claimed that no funds had been withdrawn and that approximately $533 million "is currently held in a 100 percent non-US subsidiary of the company".The lenders further said that Byju's failed leadership and mismanagement has resulted in significant loss of the company's business and the value of the company's assets.
"Shareholders and the company's creditors have seen the value of their investments decline, employees and vendors have not been paid on time and customers have suffered losses," the lenders said.
It was once valued at $22 billion, but the edtech company's valuation has dropped by nearly 95 percent after investors reduced their stake in several rounds.
“Epic!, Neuron Fuel and Tangible Play will benefit from much-needed oversight while a plan is developed to maximize the value of these assets for the benefit of all stakeholders,” the group of lenders said with their action. "
In 2021, Byju's Alpha was set up as a US subsidiary to receive the proceeds of the term loan.“Byju’s first violation occurred after March 16, 2022, when it failed to submit the required unaudited quarterly financial information,” the lenders claimed.
In February 2024, Byju's Alpha filed for Chapter 11 bankruptcy protection in the US.
The lenders said in a statement that since Byju's began defaulting on its term-loan obligations (on a $1.2 billion loan), "we have worked productively and collaboratively to help Byju's cure its multiple defaults." Every possible effort has been made to work from”.
“However, it is clear that the management of BYJU's has no intention or ability to honor its obligations under the term loan. Indeed, BYJU's founder, who also serves as one of the three directors of the overall enterprise – BYJU Raveendran , Riju Ravindran and Divya Gokulnath – the creditors alleged, "$533 million of loan funds were illegally diverted, the whereabouts of which are still unknown."
The edtech company had previously claimed that no funds had been withdrawn and that approximately $533 million "is currently held in a 100 percent non-US subsidiary of the company".The lenders further said that Byju's failed leadership and mismanagement has resulted in significant loss of the company's business and the value of the company's assets.
"Shareholders and the company's creditors have seen the value of their investments decline, employees and vendors have not been paid on time and customers have suffered losses," the lenders said.
It was once valued at $22 billion, but the edtech company's valuation has dropped by nearly 95 percent after investors reduced their stake in several rounds.
“Epic!, Neuron Fuel and Tangible Play will benefit from much-needed oversight while a plan is developed to maximize the value of these assets for the benefit of all stakeholders,” the group of lenders said with their action. "
In 2021, Byju's Alpha was set up as a US subsidiary to receive the proceeds of the term loan.“Byju’s first violation occurred after March 16, 2022, when it failed to submit the required unaudited quarterly financial information,” the lenders claimed.
In February 2024, Byju's Alpha filed for Chapter 11 bankruptcy protection in the US.
