INSUBCONTINENT EXCLUSIVE:
According to BYJU'S, lenders represented by Glas Trust wrongly accelerated the loan in March 2023 which was to be repaid in November 2026
(Photo: Reuters)4 min read Last Updated : Sep 16 2024 | 12:00 AM IST
US lenders represented by Glas Trust have countered BYJU's founder
Byju Raveendran's claim on verified debt on the company being merely around Rs 20 crore, and have said that the beleaguered edtech firm will
have to pay the entire $1.2 billion Term Loan B along with interest.
The founder of Think and Learn (TLPL) and owner of BYJU'S brand, Byju
Raveendran, had about a week ago said that verified debt on the company is only Rs 20 crore as per insolvency proceedings and he may not
loan lender 'and even if they did, BYJU's would still be obligated to repay the full amount of the loan plus interest
Any argument otherwise is illegitimate, and Byju knows it," a steering committee of the ad hoc group of term loan lenders to Byju's Alpha,
Inc said in a statement.
Glas Trust has sued BYJU'S for the recovery of $1.2 bn TLB in US as well as in India.
The financial trouble of
once the most-valued Indian edtech firm BYJU'S started after US-based lenders started legal action against the company to recover $1.2
billion TLB.
The lenders have alleged that BYJU'S group firm BYJU'S Alpha secured $1.2 billion Term Loan B , which is a loan given by
institutional investors, and moved $500 million out of the US in breach of loan agreement norms.
BYJU'S has countered the allegation
levelled by the lenders.
The lenders panel said almost all key personnel have abandoned BYJU's, including the chief executive officer,
chief financial officer and General Counsel, and it has now seen a second auditor resign in less than two years due to BYJU'S inability to
explain away the whereabouts of the $500 million, among other reasons.
According to BYJU'S, lenders represented by Glas Trust wrongly
accelerated the loan in March 2023 which was to be repaid in November 2026.
The Insolvency Resolution Professional (IRP) has not admitted
$1.35 billion debt claim made by Glas Trust during an ongoing insolvency proceedings against BYJU'S.
The lenders' panel said BYJU'S does
not have the power to disqualify any lenders and the power belongs exclusively to Timothy R Pohl, as the sole director and officer of BYJU's
Alpha, Inc, as recognized by the Delaware court, and Pohl has never disqualified any lender.
The lenders' panel said that Raveendran
continues to make false statements to the public in a desperate effort to conceal that he very likely orchestrated the theft of more than
$500 million and shift the blame for his failures in managing Think - Learn.
Raveendran, however, maintains his stand on Glas Trust
represented lenders that they are not eligible to recover dues.
"Under the credit agreement, not just The Borrower but even the parent
company TLPL has the right to disqualify Lenders
Tim Pohl is simply a nominee of the lenders
He does not have any powers to disqualify lenders, nor can his nomination take away the contractual right that TLPL has to disqualify
lenders," Byju said.
The lenders' panel also countered Raveendran's statement that Glas-represented lenders will have to prove that they
are not a distress fund in New York court to proceed on their demand which is difficult for them.
"Whether any lender is a distressed
fund' is not on trial in New York
Additionally, the New York litigation is not a prerequisite to these proceedings," the panel said.
"The price of the TLB instrument has no
bearing upon the validity of Glas' claim or the amounts owed by BYJU's
BYJU's borrowed $1.2 billion (plus interest)
It does not need to pay more if loan trading prices go up, and it does not need to pay less if the loan trading prices go down
This is a basic tenet of how the finance markets work," the panel said.First Published: Sep 15 2024 | 8:36 PMIST
