Byju's defaulted on $1.5 billion loan, says Delaware Supreme Court; supports US lenders

Court on Byju's US lenders: The Delaware Supreme Court has upheld a previous ruling that Edtech firm Byju's defaulted on a $1.5 billion loan.  

The court ruling has given a free hand to the lenders, to now demand full repayment and take control of Byju’s Alpha Inc, which is Byju’s US entity. Besides, the US lenders can appoint Timothy Pohl as its sole Director.

This ruling has confirmed that Byju’s was in default, a fact that has been personally acknowledged by Byju Raveendran (founder) and Riju Ravindran, when they signed multiple amendments to the credit agreement on Byju’s behalf from October 2022 to January 2023,” the steering committee of the ad hoc group of term loan lenders to Byju’s Alpha, Inc said in a statement

This is the second public statement from the lenders reiterating that Byju’s and Raveendran must repay the outstanding loan.

As per the court, accountability is needed on the part of the edtech company for its financial defaults. The company cannot distance itself from conceding to those defaults and their consequences, the lenders said.

“Byju has attempted to concoct an alternate narrative that Byju’s did not default and to place the blame of the company’s failure on others rather than repay lenders money that is rightfully owed to us, including disclosing what happened to the $533 million of missing loan proceeds. It is his unreliable word against that of the highest court in the State of Delaware,” the lender have said.

The US lenders in the past have also said that Byju’s must repay the borrowed $1.2 billion along with interest. As per these lenders, there has been no contractually due payment from Byju’s for more than 17 months.

On September 17, Glas Trust, the trustee for lenders to which Byju's owes $1.2 billion, moved the Supreme Court challenging its removal from the committee of creditors (CoC) of the debt-ridden Think & Learn Pvt Ltd by the interim resolution professional (IRP).