Pratik Das, Pune
The Delaware Supreme Court confirmed that Byju’s has failed to pay back its Term Loan B. On September 24, 2024, Byju’s US lenders said the court agreed with an earlier decision, stating that the company had defaulted on the loan. This allows the lenders and their agent, GLAS Trust, to take legal action against Byju’s.
Byju’s had taken a $1.2 billion Term Loan B from US-based lenders through its holding company, Byju’s Alpha. The lenders, through their agent GLAS Trust, went to the Delaware Court of Chancery, claiming that Byju’s missed payments on the loan and asked for early repayment. Byju’s parent company, Think and Learn, disputed this, but the court sided with the lenders.
The steering committee of Byju’s term loan lenders said that Byju’s founder and CEO, Byju Raveendran, along with his brother Riju Ravindran, admitted that Byju’s had defaulted on its loan agreement by October 2022. They agreed with the court as the finding was in line with the brothers’ thoughts that the company did not keep their promises and failed to follow the loan agreement.
The committee stated, “This ruling clearly shows that Byju’s was in default, which Byju and Riju personally admitted when they signed several changes to the loan agreement between October 2022 and January 2023.” There hasn’t been any immediate official response from Byju’s on the issue.
Byju’s did not respond immediately to a request for comment.
US lenders, through GLAS Trust, had filed a claim for $1.35 billion in Indian courts during Byju’s ongoing insolvency case. Recently, the lenders increased their total claim to $1.5 billion.
The committee stated that the Delaware Supreme Court confirmed the lenders had the legal right to speed up the repayment of the loan and take control of Byju’s Alpha Inc.
The committee said that Byju has tried to create a different story, claiming that the company didn’t default and blaming others for its problems, instead of paying back the lenders. This includes explaining what happened to the missing $533 million from the loan.
The lenders’ group has stated that this is a case of his opinion versus Delware’s top court’s decision. They also said that the results that came out today represent that the lenders have done the right thing, proving Byju’s statements as false.
The committee stated that the Delaware Supreme Court found that the changes to the loan agreement made between October 2022 and January 2023 show that Byju’s admitted there were defaults and understood the consequences, which means GLAS has the legal right to take action.