According to BYJU’S, lenders represented by Glas Trust wrongly accelerated the loan in March 2023, which was due to be repaid in November 2026. (Photo: Reuters)
US lenders represented by Glas Trust have refuted BYJU’s founder Byju Raveendran’s claim that the company’s verified debt is just around Rs 20 crore, and said the beleaguered edtech firm will have to repay the entire $1.2 billion term loan B along with interest.
Think and Learn (TLPL) founder and BYJU’s brand owner Byju Raveendran said about a week ago that the company’s verified debt is just Rs 20 crore as per insolvency proceedings and it may not have to pay any money to US lenders represented by Glas Trust.
“Neither Byju’s nor the IRP have the authority to disqualify any term loan lender, and even if they did, BYJU’S would still be obligated to repay the full loan amount plus interest. Any argument to the contrary is illegitimate and Byju’s knows this,” a steering committee of the ad hoc group of term loan lenders Byju’s Alpha, Inc. said in a statement.
Glas Trust has sued BYJU’S to recover $1.2 billion in TLB in the US and India.
The financial troubles of BYJU’S, once India’s most valued edtech company, began after US-based lenders initiated legal action against the company to recover TLB 1.2 billion.
The lenders have alleged that BYJU’S Alpha group company took a $1.2 billion term loan B, which is a loan extended by institutional investors, and took out $500 million from the US in violation of the norms of the loan agreement.
BYJU’S has refuted the allegation levelled by the lenders.
The panel of lenders said almost all key staff have left BYJU’s, including the CEO, CFO and general counsel, and has now seen a second auditor resign in less than two years due to BYJU’s failure to explain the whereabouts of the $500 million, among other reasons.
According to BYJU’S, lenders represented by Glas Trust wrongly accelerated the loan in March 2023, which was due to be repaid in November 2026.
The Insolvency Resolution Professional (IRP) has not admitted the $1.35 billion debt claim made by Glas Trust during an ongoing insolvency proceeding against BYJU’S.
The lender panel said that BYJU’S does not have the power to disqualify any lender and that the power belongs exclusively to Timothy R Pohl, as the sole director and officer of BYJU’s Alpha, Inc., as recognized by the Delaware court, and Pohl has never disqualified any lender.
The panel of lenders said Raveendran continues to make false statements to the public in a desperate effort to conceal that he most likely orchestrated the theft of more than $500 million and to deflect blame for his failures in managing Think & Learn.
However, Raveendran maintains his stance on lenders represented by Glas Trust that they are not eligible to recover dues.
“Under the loan agreement, not only the borrower but even the parent company TLPL has the right to disqualify lenders. Tim Pohl is merely a nominee of the lenders. He has no power to disqualify lenders, nor can his appointment take away the contractual right of TLPL to disqualify lenders,” Byju said.
The panel of lenders also refuted Raveendran’s statement that the lenders represented by Glas will have to prove that they are not a crisis fund in the New York court to proceed with their suit, which is difficult for them.
“In New York, there is no question of whether a lender is a distressed fund. Moreover, New York litigation is not a prerequisite for these proceedings,” the panel said.
“The price of the TLB instrument has no bearing on the validity of Glas’s claim or the amounts owed by BYJU’s. BYJU’s borrowed $1.2 billion (plus interest). It does not need to pay more if borrowing prices go up, and it does not need to pay less if borrowing prices go down. This is a basic principle of how financial markets work,” the panel said.
(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First published: September 15, 2024 | 20:36 IS
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