Glas Trust Company files insolvency petition against Byju's; fourth insolvency plea within six months
Previous insolvency pleas have been filed by entities such as the Board of Control for Cricket in India (BCCI), France-based Teleperformance Business Services, and digital marketing firm Surfer Technologies.
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Glas Trust Company LLC, a US-based non-bank loan agency, has lodged an insolvency petition against Byju's, the renowned ed tech giant, at the National Company Law Tribunal (NCLT) in Bengaluru. Acting as the administrative and collateral agent for foreign lenders, Glas Trust represents creditors who collectively provided over 85 percent of Byju's $1.2 billion term loan.
This marks the fourth insolvency plea against Byju's within a span of six months, underscoring the mounting financial challenges facing the company. Despite the plea being submitted on January 22, its formal registration with the NCLT occurred on February 21.
In response to these legal actions, Byju's has vehemently asserted that any proceedings initiated by lenders before the NCLT are premature and devoid of merit. The company has emphasized that the validity of lenders' actions, including loan acceleration, is currently being contested in various legal forums, including the New York Supreme Court. Byju's also noted the synchronicity between the lenders' actions and the commencement of a rights issue by the company.
The cascade of insolvency petitions underscores the deepening financial woes confronting Byju's. Previous insolvency pleas have been filed by entities such as the Board of Control for Cricket in India (BCCI), France-based Teleperformance Business Services, and digital marketing firm Surfer Technologies. Each petitioner has cited substantial outstanding dues owed by Byju's, with BCCI claiming over Rs 150 crore, Surfer Technologies asserting a debt of Rs 4 crore, and Teleperformance claiming Rs 2.3 crore.
Legal proceedings regarding these insolvency petitions are underway, with the NCLT issuing notices in all cases. BCCI's petition is scheduled for a hearing on February 28, while hearings for Surfer Technologies and Teleperformance Business Services are expected in March 2024.
As Byju's grapples with this onslaught of legal challenges, the company's founder and CEO, Byju Raveendran, recently announced in a shareholder letter that the rights issue, aimed at raising $200 million at a significantly reduced valuation, has been fully subscribed. This underscores Byju's ongoing efforts to navigate its financial difficulties amidst mounting legal pressures.
