2023-11-10 16:17:00
Byjus, an educational technology company in dire financial straits, has suffered another setback. The court ruled in favor of the lenders in the complaint filed against Byjus for non-payment of debts of 1.2 billion dollars.
A Delaware court of chancery has ruled that lenders such as Redwood Investments and Silver Point Capital have the right to take control of Byjus Alpha, the defaulting American company of Byjus. The lenders have replaced Byjus Alpha’s relative, Malayali owner Baiju Ravindran, from the board of directors of Byjus Alpha and appointed their representative, Timothy Fallen. Baijus has not commented on the verdict. A spokesperson for the lenders responded that they were happy with the court’s ruling.
In the post-Covid era, Byjus faced a crisis when the possibility of online learning decreased. Lenders kept approaching for money, but Byjusin was unable to repay. Following this, some investors had reduced the value of the company.
In September, Byjus had promised to sell off subsidiaries and pay off the debt in full within six months as it struggled to repay the loan. It was also said that Rs 2,500 crore would be paid as the first step. The court ruling comes at a time when negotiations to raise money for it by selling another American subsidiary, Epic Creations, are nearing completion.
Byjus had also approached the court alleging that lenders were pressuring them to take over Byjus’s companies. The court rejected Byjus’s complaint. Earlier this year, the court said that the subsidiary, Byjus Alpha, was set up to protect the rights of lenders. Lenders also said they have no intention of acquiring Byjus entirely.
English Summary: Court verdict in favor of lenders in complaint filed against bayjus
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