Byju's Faces Potential Insolvency as NCLT Issues Notice on Loan Default

Byju's Faces Potential Insolvency as NCLT Issues Notice on Loan Default

The National Company Law Tribunal (NCLT) in Bengaluru has issued a notice to Think & Learn Pvt Ltd, the parent company of ed-tech startup Byju's, following a petition filed by international lender Glas Trust LLC. This petition seeks to initiate insolvency proceedings against the company.

Glas Trust Company LLC, a non-banking loan agency based in the United States, represents over 100 lenders in this matter. They filed the petition after Byju's allegedly defaulted on a $1.2 billion term loan. According to Glas Trust Company, the default involves over ₹8,000 crore in outstanding payments.

Through legal representation by Khaitan & Co, Glas Trust Company claims the default began in 2022 and is acknowledged by Byju's. The NCLT bench comprising judicial member K Biswal and technical member Manoj Kumar Dubey issued the notice and directed Byju's to respond within three weeks.

This is not the only potential insolvency threat Byju's faces. Three other entities have also filed petitions against the company. Digital marketing vendor Surfer Technologies was the first to submit a petition on February 6, 2024, followed by Business Process Outsourcing (BPO) company Teleperformance Business Services filed a petition on February 8, 2024.

Additionally, the Board of Control for Cricket in India (BCCI) seeks insolvency proceedings over a separate ₹158 crore payment default.