In a new setback for struggling startup Byju’s, term loan lenders have filed petitions in a US court. They are seeking to initiate involuntary Chapter 11 bankruptcy proceedings against Byju’s US subsidiaries Epic, Tynker, and Osmo.
The lenders aim to protect and maximize the value of these entities. They hope to benefit all stakeholders and prevent further diversion of assets. This move marks a significant escalation in the financial troubles faced by Byju’s.
The petitions were filed as Byju’s continues to grapple with its financial challenges. The lenders’ statement on Wednesday highlighted their concerns. They believe that initiating bankruptcy proceedings is necessary to safeguard the assets and interests of all parties involved.
Byju’s, an edtech giant, has been facing increasing scrutiny over its financial practices. The company has expanded aggressively in recent years. Acquiring US-based companies like Epic, Tynker, and Osmo was part of this strategy. These acquisitions were aimed at enhancing Byju’s global footprint.
The lenders’ decision to seek bankruptcy protection for these subsidiaries underscores the severity of Byju’s financial issues. Chapter 11 proceedings allow companies to restructure their debts while continuing operations. This move is often seen as a way to stabilize companies in distress.
Byju’s has not yet commented on the lenders’ petitions. The company’s US subsidiaries, Epic, Tynker, and Osmo, also remain silent on the matter. The court’s response to the petitions will be closely watched by stakeholders.
This development adds to the challenges facing Byju’s. The company has been under pressure to address governance and financial transparency issues.
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