- The Delaware Supreme Court has ruled that edtech giant Byju's defaulted on a $1.5 billion loan, allowing lenders to demand full repayment, take control of Byju's US unit, and appoint Timothy Pohl as its sole director.
- The lenders criticized Byju’s for avoiding responsibility and attempting to shift blame instead of repaying the loan, raising concerns about $533 million in missing proceeds.
The Delaware Supreme Court has confirmed that edtech giant Byju's defaulted on a $1.5 billion loan, allowing lenders to demand full repayment, take control of Byju’s US unit (Byju’s Alpha Inc.), and appoint Timothy Pohl as its sole director, according to the lenders.
“This ruling confirms that Byju’s was in default, which both Byju Raveendran (founder) and Riju Ravindran personally acknowledged when they signed multiple amendments to the credit agreement on Byju’s behalf from October 2022 to January 2023,” the steering committee of the ad hoc group of term loan lenders to Byju’s Alpha, Inc said in a statement.
A syndicate of 37 financial institutions purchased Byju’s $1.2 billion loan on the condition that if Byju’s defaults, Glas can enforce the lenders' rights. For security, Byju's Delaware subsidiary, Byju’s Alpha, pledged 100% of its equity as collateral.
This is the lenders' second public statement urging Byju’s and its founder Raveendran to repay the outstanding loan. The lenders emphasized that Byju’s must be held accountable for its financial defaults and cannot avoid the consequences of its actions, as stated by the court.
The lenders accused Byju of attempting to create an alternate narrative, claiming that Byju’s did not default and blaming others for the company’s failures instead of repaying the money owed to them. They highlighted concerns about the undisclosed whereabouts of $533 million in missing loan proceeds, stating that it was Byju’s word against that of the highest court in the State of Delaware.
Edited by Harshajit Sarmah
ALSO READ:
Harshajit Sarmah
