In a further setback for troubled startup Byju's, several of its term loan lenders have filed petitions in a US court, seeking to commence involuntary Chapter 11 bankruptcy proceedings against the company's US subsidiaries Epic, Tynker, and Osmo.
The lenders' goal with this measure is to safeguard and maximize the value of the businesses for the benefit of all stakeholders while also preventing future asset diversion, according to a statement released on Wednesday.
The three businesses were the US-based guarantors of the $1.2-billion term loan. The petition was also backed by Glas Trust Company, the term loan's administrative agent. Byju's did not immediately respond to the development.
The lenders stated that they are prepared to inject the required funds into Epic, Tynker, and Osmo to restructure the companies.
Byju's, which was once valued at $22 billion, spent almost $820 million to buy these firms between 2019 and 2021 in order to extend its US reach. Epic, the most costly purchase at $500 million, was also put up for sale by the cash-strapped corporation in order to repay its term loan to lenders.
Even though Byju's defaulted on its term loan requirements, the lenders indicated they sought to assist the company in resolving the matter.
However, the company's management has neither a plan or the ability to fulfill its commitments under the term loan.
