Updated February 2nd, 2024 at 08:52 IST
BYJU's Alpha files for bankruptcy in Delaware
The development comes after the company launched a rights issue to raise $200 million from existing shareholders.
Embattled edtech Byju's Alpha has filed for Chapter 11 bankruptcy proceedings in the U.S. court of Delaware, listing liabilities in the range of $1 billion to $10 billion.
The Alpha unit of the Bengaluru-based company listed its assets in the range of $500 million to $1 billion, as per a court filing. Estimated creditors for the once decacorn were in the range of 100 to 199.
A court-appointed agent took over the shell company after the $1.2 billion debt, the Term Loan B, which BYJU’s had taken in 2022 for its operations.
As of late, a cluster of BYJU’s investors have called for an extraordinary general meeting (EGM) on February 23 with a set of demands, that include the ouster of founder Byju Raveendran and his family from the board.
Once valued at $22 billion in 2022, investors Blackrock and Prosus have slashed their valuation to $1 billion and $3 billion respectively.
BYJU's has been attempting to steer ship to recovery, with a call to raise $200 million through a rights issue of shares to clear "immediate liabilities" and for other operational costs.
It has also been negotiating for the repayment of the Term Loan B, offering to sell assets Epic and Great Learning in the last few months. Its workforce is also down from around 10,000 to about 5,000. The firm has also been under the scanner of the Enforcement Directorate over alleged violations of the FEMA or foreign exchange laws.
Alpha Inc. doesn’t have enough money to keep fighting with its parent company about the debt, according to court papers filed by Alpha Chief Executive Officer Timothy Pohl.
The lenders required the company to file bankruptcy before they would continue funding Byju’s Alpha, the Chapter 11 petition said.
The company plans to sue a small hedge fund in Florida it has accused of wrongfully helping Byju’s parent hide more than $500 million in cash that should go to creditors, according to the filing.
Published February 2nd, 2024 at 08:52 IST