Byju’s breached loan terms: Edtech company Byju’s, which is facing allegations of cash crunch and mismanagement, is showing no sign of abating. Meanwhile, the company has now suffered another setback. According to a report by news agency Reuters, Byju has violated the terms of the $42 million loan and an arbitrator has asked it not to sell some shares of the group firm.
Byju’s was India’s largest startup by 2022
By 2022, Byju’s was India’s largest startup when it was valued at $22 billion, but the company’s troubles continued to grow amid auditor exit, regulatory probe and investors demanding the ouster of its CEO Byju Raveendran for mismanagement. Went. Currently the company is valued at around $250 million. The company has been denying the allegations leveled against it since the beginning.
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Byju’s violated the terms of $42 million loan
In the latest controversy, MEMG Family Office, led by Indian billionaire Dr Ranjan Pai, in March failed to repay a $42 million loan through a pre-agreed transfer of some shares of Aakash Education, a Byju Group company. Arbitration proceedings were initiated against Byju for.
An arbitrator appointed under the rules of the Singapore International Arbitration Center has ordered Byju’s not to dispose of 4 million shares of Aakash. According to the loan agreement, this is equivalent to 6 percent stake on the basis of last year. The arbitrator had issued this order on Thursday i.e. April 4.
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Byju’s in talks with MEMG to resolve the dispute
“A case of breach of the loan agreement” has been made out, emergency arbitrator Ritin Rai wrote in his order. Byju’s did not respond to Reuters’ request for comment. A source close to Byju’s said that the order is not detrimental to Byju’s and the company is in talks with MEMG to resolve the matter.
The order said that during the arbitration proceedings, Byju said that it could not obtain approvals from certain investors on time, which were required to transfer the shares to MEMG.
Byju’s has also been unable to pay employees in recent months as it is unable to access the funds it recently raised due to a legal dispute with some of its investors.
First Published – April 5, 2024 | 5:18 PM IST
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