Troubled co Byju’s US units face bankruptcy case over $1.2 billion loan

MUMBAI: In a fresh jolt to struggling startup Byju’s, some of its term loan lenders have filed petitions in a US Court, seeking to initiate involuntary Chapter 11 bankruptcy proceedings against the company’s US subsidiaries Epic, Tynker and Osmo.
Through this move, the lenders are seeking to protect and maximise value of the entities for the benefit of all stakeholders and prevent further diversion of assets, they said in a statement on Wednesday.The three entities were the US-based guarantors of the $1.2-billion term loan. The petition has also been supported by Glas Trust Company — the administrative agent of the term loans. Byju’s did not immediately comment on the development.
The lenders said that they are willing to infuse the necessary capital into Epic, Tynker and Osmo to reorganise the businesses. Once valued at $22 billion, Byju’s spent nearly $820 million in all to acquire these businesses through 2019-21 to expand its US footprint. Of the three entities, Epic — the most expensive acquisition at $500 million — was also put on the block by the cash-strapped company to repay the term loan to lenders.
Even though Byju’s defaulted on term loan obligations, the lenders said they tried to help the firm work through the situation. However, the company’s management has no intention or the ability to honour its obligations under the term loan.