NEW YORK: A group of lenders on Wednesday petitioned against new entities, tied to embattled edtech company Byju’s US subsidiary, into bankruptcy in a US court, alleging that these entities are not paying their debts.
The group of lenders, which gave Byju’s Alpha $1.4 billion term-loan, petitioned against Neuron Fuel Inc., Epic! Creations Inc. and Tangible Play Inc. to Chapter 11 of the US Bankruptcy Code to initiate involuntary proceedings against them, in the Delaware court.
The lenders said in a statement since Byju’s began to default (on $1.2 billion of debt) on its term-loan obligations, “we have made every effort possible to work productively and collaboratively to help Byju’s cure its multiple defaults”. “However, it is clear Byju’s management has no intention or ability to honour its obligations under the Term Loans. 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 mn in loan proceeds, the whereabouts of which are still unknown,” the creditors alleged.