Term loan lenders of BYJU’s $1.2 billion term loans have initiated corporate insolvency resolution proceedings against Think & Learn Pvt Ltd (BYJU’s) under section 7 of the Insolvency and Bankruptcy Code of India. The ad hoc group of lenders, represented by GLAS Trust Company LLC, took this step after over 16 months of unsuccessful attempts to restructure the term loans, resolve outstanding defaults, and avoid further enforcement actions.
In November 2023, the Delaware Chancery Court confirmed BYJU’s default on loan obligations, empowering Term Loan lenders to replace the sole director of BYJU’s Alpha, the U.S. subsidiary established in 2021.
BYJU’s post-default actions include refusing required loan payments, transferring $533 million in loan proceeds to a hedge fund, delaying financial reporting obligations, and seeking to retain sale proceeds from Epic! against lenders’ claims.
The Ad Hoc Group emphasizes that BYJU’s management, despite their efforts, appears unwilling or unable to honor obligations. The group expresses hope that India’s corporate insolvency resolution process will stabilize Think & Learn, ensuring a resolution plan in the best interests of all stakeholders.