American finance company approaches NCLT to initiate insolvency proceedings against Byju's
Bengaluru: Glas Trust Company LLC, a United States-based non-bank loan agency, filed a plea for insolvency against the troubled-ed tech firm Byju's at the National Company Law Tribunal (NCLT) in Bengaluru, a media report said.
Glas Trust acts as the administrative and collateral agent for the lenders involved. These lenders, representing foreign entities, collectively provided over 85 percent of Byju’s $1.2-billion term loan, reported Moneycontrol.
Foreign lenders had approached the NCLT in Bengaluru to initiate legal action against Byju's, Moneycontrol reported.
This is the fourth insolvency petition against Byju's within a period of less than six months. Although the plea was submitted on January 22, it was formally registered with the NCLT on February 21.
Byju's responded, stating that any actions taken by the lenders before the NCLT are premature and lacking in merit, according to the Moneycontrol report.
The company stressed that the validity of the lenders' actions, including the acceleration of the term loan, is being contested through various legal channels, including proceedings in the New York Supreme Court.
Byju's also said that the timing of the lenders' actions coincides with the commencement of a rights issue by the company.
Earlier today, Byju's founder and CEO Byju Raveendran said in a shareholder letter that the company's rights issue, aimed at raising $200 million with a valuation cut of 99 percent, has been completely subscribed, the report said.
BCCI, Teleperformance Business Services, and Surfer Technologies have each filed insolvency pleas against Byju's.
The NCLT has issued notices for all these petitions. BCCI's claim, amounting to over Rs 150 crore, was first heard in November 2023, while Surfer and Teleperformance's claims, of Rs 4 crore and Rs 2.3 crore respectively, were heard in February 2024.
BCCI's case is scheduled for a hearing on February 28, while Surfer and Teleperformance's cases are expected to be heard in March 2024.
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