An Indian court has agreed to accept a petition to force embattled online tutor Byju's into an insolvency process, a setback for the embattled company that's struggling to stay afloat.
The National Company Law Tribunal said Tuesday it found no reason to deny a bankruptcy petition against Byju's filed by creditor Board of Control for Cricket in India. The court said the "existence of a debt and a default in the payment of debt is clearly established."
The court appointed an interim resolution professional, who will run the company during the insolvency proceedings. The plea brought by the cricket board is one of several bankruptcy cases Byju's is fighting in India and abroad.
"We wish to reach an amicable settlement with BCCI and we are confident that, despite this order, a settlement can be reached," a spokesperson for Byju's said in a statement. "In the meantime, our lawyers are reviewing the order and will take necessary steps to protect the company's interests."
Byju's, once one of India's hottest startups founded by school teacher Byju Raveendran, ran into financial and legal problems in the past few years after its business dried up. This lead to a crisis of investor confidence, thousands of job cuts and its valuation nosediving to under $3 billion, from $22 billion in 2022.
Byju's, earlier this year, decided to consolidate into three divisions - its marquee online learning app business, online classes and tuition centers and lastly, test preparation - with each having a separate head. This came after a seven-month operational and costs review led by India CEO Arjun Mohan, who left the post and transitioned to an external advisory role, without providing a reason for the move.
Mohan, former CEO of edtech upGrad, joined Byju's last July to lead the international business and was made India CEO in September. Byju's, which operates in 21 countries as per its LinkedIn page, said the restructuring would not impact its international businesses, since it was product, not geography, specific.
Reveendran has been taking on a more "hands-on" approach in daily operations, compared with his recent focus on aspects such as raising capital and global expansion.
