Byju’s faces insolvency proceedings from foreign lenders in India, company says ‘baseless’
New Delhi, Jan 25 (IANS) Byju’s lenders, who extended more than 85 per cent of Byju’s $1.2 billion term loan, have reportedly filed an insolvency petition against the edtech major at the Bengaluru bench of the National Company Law Tribunal (NCLT).
Byju’s had secured $1.2 billion in debt through a term loan facility from a consortium of foreign investors in November 2021.
The company said in a statement that the validity of lenders’ actions, including acceleration of the term loan, “is pending and under challenge in several proceedings, including before the New York Supreme Court”.
“Hence, any proceedings by lenders before NCLT are premature and baseless,” it added.
“Surprisingly, the acceleration and consequent actions by the lenders appear to be based, in part, on the failure of Whitehat Education Technology Pvt. Ltd, a wholly-owned subsidiary of Think & Learn, to guarantee the term loan,” the edtech major said.
“This is despite the fact that provision of such guarantee would contravene extant RBI regulations. In fact, proceedings are on foot before the Delaware appellate courts on this very issue,” it added.
Byju’s said that the timing of the lenders’ proceedings coincides with the commencement of a rights issue by the company.
“In good faith and on a continuous basis, Byju’s has been in regular touch with the lenders and has also involved them in the sales process of some of its prized US subsidiaries to settle matters,” it said.
“The timing of these proceedings is also conspicuous as it coincides with the commencement of a rights issue by the parent company of Byju’s.”
Previously, the lenders made unsuccessful attempts to interfere with Byju’s rights to deal with capital provided under the loan agreement. The Delaware Chancery Court has rightfully refused to let the lenders do so, and lenders’ subsequent attempts on this front have been unsuccessful, it said.
“Incidentally, the Delaware court has also refused to interfere with BYJU’S rights to disqualify distressed asset fund lenders under the loan agreement – who continue to take these steps in an attempt to get Byju’s to succumb to their extortionate demands,” said the edtech company.
–IANS
na/vd
