In America, the lenders to Byju’s have filed a bankruptcy petition against its assets. The companies against whom the bankruptcy petition has been filed are Epic, Tynker and Osmo. Edtech companies were acquired by Byju’s for $1.4 billion.
Some term loan providers and a company called Glass Trust Company have filed petitions under the US Bankruptcy Code against digital reading platform Epic, Neuron Fuel, operator of kids coding platform Tynker, and Tangible Play, operator of educational games platform Osmo.
The lenders said that it is clear that Byju’s management neither has the capacity nor the intention to repay its loans.
The lenders said that Byju’s is unable to run these companies, hence we are doing this to preserve the value of Epic!, Neuron Fuel and Tangible Play.
When and how did the controversy start
The battle between lenders and Byju’s has been going on since 2022.
In fact, in 2022, Byju’s Alpha Inc. was formed as a subsidiary of US Byju’s to take term loans. But then this company could not provide the necessary unaudited quarterly financial information to the lenders and became a defaulter.
Since then, several attempts of negotiations were made but all were fruitless and the lenders escalated the matter. They started putting pressure on the term loan. Also, they took control of the equity pledged in Byju’s Alpha. Byju’s Ravindran was replaced by a new person and Byju’s was brought to the Bangalore bench of NCLT.
