Byju's crisis: Lenders file insolvency petition against India's ed-tech firm
The company has been locked in a legal dispute with creditors over the missed payment
Mumbai: Lenders of Byju's Alpha filed an insolvency petition after the Indian education startup missed payment on a $1.2 billion loan, according to people with knowledge of the matter.
The filing was made this week to a National Company Law Tribunal in India, the people said, asking not to be identified as the document isn't public yet.
"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," Byju's said in an emailed response.
A representative for the lenders' group didn't immediately respond to an email seeking comments. Moneycontrol reported the development earlier.
The company, founded by former teacher Byju Raveendran and once valued at $22 billion, has been locked in a legal dispute with creditors over the missed payment.
Raveendran attracted capital from some of the biggest investors in the tech world, including Mark Zuckerberg's Chan Zuckerberg Initiative, Silver Lake Management and Naspers Ltd.
But the online tutoring firm lost money after a pandemic-era boom in business dried up. Raveendran, pledged his home as well as those owned by his family members to raise money for paying employees, Bloomberg reported in December citing people familiar with the matter.
Byju's Alpha is a holding company that the lenders need to control to protect their rights, a creditors' lawyer told a Delaware Court earlier this year. The creditors accused the company of hiding $533 million in an obscure hedge fund, according to court filings.
Lawyers for Byju's have said the distressed-debt lenders are "playing hardball" to create leverage in negotiations.