A foreign creditor urged the National Company Law Tribunal (NCLT) to prevent Byju’s from transferring its shares. This request comes amidst Byju’s efforts to negotiate and settle its debts with other lenders. The company is seeking additional time to explore possible settlements.
Glas Trust LLC, a foreign creditor, urged the National Company Law Tribunal (NCLT) in Bengaluru to restrain Think & Learn, the parent company of the edtech firm Byju’s, from pledging, selling, or transferring its shares. The NCLT granted Byju’s time to respond to the prayer and scheduled the matter for a hearing on June 10.
Glas Trust, a US-based non-banking loan agency that appointed by over 100 lenders as an administrative agent for a term loan of around Rs. 1.2 billion. The company moved the NCLT after Byju’s defaulted on the repayment of a loan of over Rs. 8,000 crore.
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The plea filed through Khaitan & Co claimed that the default in the repayment of the loan began in 2022. Senior Advocate Udaya Holla and advocate Avinash Balakrishna, appearing for Glas Trust, informed the tribunal that Byju’s borrowing more money and alienating its shares in exchange, causing grave prejudice to them.
The US-based lender requested the NCLT to swiftly impose restrictions on the company, prohibiting it from pledging, selling, or transferring its shares.
Holla pointed out that Byju’s founder, Raveendra Byju, secured a loan of Rs.350 crore by pledging some of his shares. Given that Byju resides in Dubai, the lender expressed concerns about the feasibility of legal action and recovery of funds.
Holla noted,
“The numerous insolvency petitions awaiting resolution at NCLT Bengaluru reflect the financial instability of Byju’s.”
Senior Advocate Dhyan Chinappa, representing Byju’s, requested a postponement to address the allegations raised by the lender, stating that they lacked substantiated evidence. He emphasized that seeking relief without allowing Byju’s a chance to respond was unfair. The tribunal granted Byju’s the requested time to prepare a response and scheduled a hearing for June 10.
Additionally, Byju’s requested an extension to investigate options for resolving debts owed to other lenders in a related matter.
Byju’s previously given a deadline extension until April to negotiate a settlement with the Business Process Outsourcing (BPO) firm Teleperformance Business Services.
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Advocate Promod Nair, representing Byju’s, stated that the education technology company also actively pursuing a resolution with the digital marketing vendor Surfer Technologies.
The National Company Law Tribunal (NCLT) granted Byju’s additional time to reach settlements with both service providers and instructed them to submit a joint settlement memorandum by June 26.
If unsuccessful, the tribunal stated its intention to proceed with hearing the insolvency petitions.