In the latest statement, the lenders have raised their total claim to $1.5 billion.
New Delhi:
Breaking news from the world of education technology! Byju Raveendran, the founder of Byju’s, a well-known edtech company, has made a bold declaration regarding the financial trouble facing his firm. Raveendran stated that he is prepared to pay back money owed to lenders but only if they cooperate with him.
During a long, two-and-a-half-hour conversation with the media, Raveendran warned that lenders wouldn’t see a dime if the ongoing insolvency process against Byju’s continues. “If they are willing to work with me, I am willing to give them money back before I take a single rupee out. We paid $140 million, but they wanted the entire $1.2 billion we had already committed or invested by then. There is no way we could have given them back for a long time. Most lenders wanted to settle, but a couple wanted to make a killing out of it,” he explained.
Byju’s Faces Insolvency Proceedings
Recently, Byju’s found itself in a challenging situation. The crisis began when the Board of Control for Cricket in India (BCCI) took the firm to the National Company Law Appellate Tribunal (NCLAT) to recover dues amounting to Rs 158.9 crore. Thankfully, Byju’s cleared the dues, leading to the NCLAT dropping the insolvency proceedings against the company.
However, the relief was short-lived. U.S. lenders, represented by their agent Glas Trust, challenged the NCLAT’s decision in the Supreme Court, which led to the reinstatement of insolvency proceedings against Byju’s.
Loan and Claims Mount
Byju’s had taken a hefty $1.2 billion Term Loan B (TLB) through its holding company, Byju’s Alpha, from U.S.-based lenders. The trouble escalated when these lenders, via Glas Trust, claimed that there had been defaults on loan payments. They sought immediate repayment of the $1.2 billion loan.
As the insolvency process unfolds, these lenders have filed claims in Indian courts for a total of $1.35 billion. Recently, they even upped their total claim to an astounding $1.5 billion.
Raveendran’s Clarifications
In his recent statements, Raveendran clarified that none of the money raised from the U.S. loans has been brought into India, as that would need approval from the Reserve Bank of India. He expressed concern over aggressive lenders who have initiated legal action against the company, stating that their motives seem to revolve around profiting from Byju’s distress.
Raveendran reassured stakeholders that all acquisitions and dealings had the approval of Byju’s board, which included various significant investors. “Most of the acquisitions were brought in by the investors, and we got a bit carried away. They wanted us to launch in 40 countries simultaneously. Investors celebrated our success when we secured the $1.2 billion loan,” he said.
Board Changes and Future Prospects
There have been noteworthy changes within Byju’s board; members representing major investment firms, such as Peak XV Partners (previously Sequoia Capital India), Prosus, and the Chan Zuckerberg Initiative, resigned back in June 2023. Raveendran remarked that the resignations followed the filing of the lawsuit in Delaware, with some board members worried about the implications of the loan repayment falling on them.
Despite these shakeups, Raveendran emphasized that the core ownership of the company remains strong, stating that out of six owners, five are still deeply involved with Byju’s. He expressed optimism about the company’s future after resolving the insolvency issues.
Hope for Revival
Raveendran remains hopeful about bouncing back after these financial challenges. He pointed out, “Our subsidiary hasn’t suffered much. At a consolidated level, we are set to generate more than Rs 5,000 crore in revenue. While we are struggling with our core business, I’m confident in our resources, as 200 million children still use our platform every month. We must revamp and revive our strategies.”
Furthermore, Raveendran made it clear that regardless of the ongoing legal battles, his passion for teaching and education will not waver. He stated, “No matter the outcome of these legal matters, I will continue to teach. No one can stop me from educating students.” With a firm belief in the company’s potential, he concluded, “Investors will come back when they see value.”
This news story from India Press Live highlights the ongoing struggle of Byju’s and its founder, Byju Raveendran, to navigate financial troubles and legal challenges while staying true to their educational mission. As this story unfolds, it becomes clear that the resolve to adapt and innovate is critical for the company’s future.
