Byju’s Grapples With Loan Breach (Image Source: IANS)
Edtech giant Byju‘s faces a fresh setback as it breaches loan terms worth USD 42 million, as revealed by a confidential order from an arbitrator. The arbitrator has instructed Byju’s not to sell some shares of its group firm, Aakash Education, amidst allegations of mismanagement.
According to the Reuters report, previously valued at USD 22 billion, Byju’s stature has dwindled amidst a series of challenges, including an auditor exit, regulatory probes, and investor demands for CEO Byju Raveendran‘s removal. Currently valued at around USD 250 million, Byju’s refutes any wrongdoing.
The latest dispute stems from MEMG Family Office, led by billionaire doctor Ranjan Pai, initiating arbitration proceedings against Byju’s for alleged non-repayment of loans totaling USD 42 million. An arbitrator, appointed under Singapore International Arbitration Centre rules, has directed Byju’s to refrain from disposing of 4 million shares of Aakash Education, amounting to a 6 per cent stake as per the loan agreement last year.
The arbitrator’s order, dated April 4, cites a “breach of the loan agreement” by Byju’s, as stated by Ritin Rai, the emergency arbitrator. Byju’s defense during arbitration proceedings revolved around the inability to obtain approvals from certain investors in a timely manner for the transfer of shares to MEMG.
Further compounding Byju’s woes, a US unit of the company filed for Chapter 11 bankruptcy proceedings in a Delaware court in February, citing liabilities ranging from USD 1 billion to USD 10 billion.
