US-based creditors of Byju’s have petitioned to put multiple subsidiaries of the edtech firm into bankruptcy as they weren’t repaying their debts, Bloomberg reported.
Creditors led by HPS Investment Partners filed involuntary Chapter 11 bankruptcy cases in Delaware against Neuron Fuel Inc., Epic! Creations Inc. and Tangible Play Inc. on Wednesday.
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All three were affiliate companies of Byju’s Alpha, a unit of Byju’s put into bankruptcy earlier this year after defaulting on 1.2 billion USD (Rs.10,009 crore) of debt. Glas Trust, a US-based non-banking loan agency, was appointed by over 100 lenders as an administrative agent for the term loan, according to a LiveMint report.
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“It is clear that Byju’s management has no intention or ability to honour its obligations, the lenders said, according to the LiveMint report. “Indeed, Byju’s founders, who also serve as the three directors of the overall enterprise — Byju Raveendran, Riju Ravindran and Divya Gokulnath — unlawfully diverted $533 million in loan proceeds, the whereabouts of which are still unknown.”
The group of lenders had also said last month the US bankruptcy court was set to impose penalties on Riju Raveendran, the brother of Byju’s founder and CEO Byju Raveendran, for not disclosing or ascertaining the location of the term loan money of 533 million USD (Rs.4,445.8 crore), part of the defaulted 1.2-billion USD loan, an Economic Times article read.
Byju’s, once valued at 22 billion USD (Rs.1.83 lakh crore) struggled to pay off its debts after demand for tutoring dropped off as the pandemic waned and schools reopened, the Bloomberg report read.
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