Byju's lenders kick off bankruptcy proceedings in the US over $1.2-billion term loan

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Also read | Byju’s woes worsen as Rajnish Kumar, Mohandas Pai to step down from advisory panelIn February, a day after the company’s key investors initiated moves to oust co-founder and CEO Raveendran, Alpha Inc. filed for bankruptcy after defaulting on the debt of $1.2 billion.

Byju's US subsidiary initiated Chapter 11 proceedings in a Delaware court stating that it lacked funds to defend itself against litigation. Alpha listed its assets in the range of $500 million to $1 billion, with estimated creditors numbering between 100 and 199, according to the court documents.A person familiar with the latest petition by the lenders said bankruptcy proceedings hadn’t been initiated against Epic, although in the Chapter 11 proceedings against Alpha, the lenders have asked Epic to produce documents.A spokesperson for Byju's did not immediately respond to Mint's queries.In September, Mint reported that the edtech firm had placed two of its businesses—Epic and higher-education platform Great Learning—up for sale to pay its term loan B lenders.

Byju’s had acquired these companies during the funding rush of 2021 to build its empire that came to be valued at $22 billion. The company’s valuation has since significantly eroded, with Byju’s itself diluting its estimated worth for its controversial $200-million rights issue.Byju’s had raised $1.2 billion through a term loan B from overseas investors in November 2021, when interest rates were low.

However, relations between Byju’s and its lenders have soured since, and interest rates have surged. The matter came to a head in June last year, when the company skipped an interest payment and took its lenders to court to prevent an acceleration of the repayment.Also read | Byju's: Battle for