Vikram Singh’s Post

Byju’s, lenders agree to alter terms of $1.2 billion loan! Troubled edtech major Byju’s has reached a tentative agreement to rework its loan pact with lenders who collectively own more than 85% of the $1.2 billion Term B loan. A Term Loan B (TLB) typically is aimed at generating long-term returns on investment through interest payment to investors while the borrower will get time to pay the principal amount only at the end of the tenure. According to the new terms, Byju’s and the group of lenders have agreed to work collaboratively toward a signed and completed term loan amendment prior to August 3, 2023. If the loan terms are successfully reworked, then the creditors would drop their demand for accelerated repayment. Further, all ongoing litigation could come to an end while avoiding enforcement actions initiated by the lenders. ▪️Let’s Understand some Past Crucial Events! Byju’s is having to rework its loan agreement with creditors after it failed to furnish audited FY22 as well as FY21 results on time. While Deloitte submitted its resignation to Byju's on June 22, the investor-appointed board members confirmed their exit from the firm’s board on June 23. Following these exits, the company appointed BDO (MSKA & Associates) as statutory auditor for five years starting with the financial year ending March 31, 2022. CEO Byju Raveendran and newly appointed CFO Ajay Goel also promised shareholders on June 24 that audited FY22 financials will be filed by September this year, while audited results for FY23 will be released by December 2023. At the same meeting, Raveendran also told shareholders that the exits of Deloitte and the board members were not coordinated. #edtech #auditor #resignation #valuation #scam

Is BYJU'S a Failure? - Let’s go through the timeline. 2011: Byju Raveendran was a former engineer and CAT topper, from Bangalore. Starting with innovative teaching methods, he founded "Think and Learn Pvt Ltd.   2015: BYJU'S Learning App was introduced and it quickly became the go-to for videos and study materials for competitive exams - a genius move as investors loved it.   2019-20: While revenue remained steady, losses spiked from ₹252 crore to ₹4,564 crore in one year.   Sept 2022: Aggressive marketing and financial mismanagement had led to a $1.2 billion loan default. (Some said they focused more on marketing than good education content)   Oct 2022: Despite growing losses, BYJU'S raises $250 million from existing investors, including secondary sales.   Jan 2023: Creditors react strongly as BYJU'S breaches provisions of the Term Loan B. BYJU'S seeked an extension from lenders to renegotiate the terms of the loan agreement..   March 2023: Relations with lenders worsened as BYJU'S failed to disclose financial results on time.   April 2023: Continued financial irregularities prompted lenders to demand a $200 million prepayment. June 2023: BYJU'S takes a bold step by filing a lawsuit against lenders, accusing them of "high-handed" practices. Byju's parent company, Think & Learn Pvt Ltd., faced scrutiny for not paying PF money to employees and was also suspended by Google and Facebook for non-payment of ad dues. Nov 2023: Byju's founder had to mortgage personal properties to secure a loan for employee salaries. The current valuation of $1 billion marks a drastic decline from it's all-time high, BYJU'S faces a challenging phase, raising questions about its future   So, the big question- Is Byju’s a Failure? With the challenges and financial accusations, only time will tell if BYJU'S will be able to retain its position. What's your take on BYJU'S? Share your thoughts below.

India's Byju's, previously cited as the largest EdTech company in the world, is not in a good place and with knock-on effects across the global market.  Although sad, this was not unexpected if we had paid more attention to the fundamentals of the efficacy of the entire business rather than just business data like user base and revenue. We should probably do a case study on this separately but it also points to the wider trend that has disturbed me for a while. I have followed education and EdTech investment reports, and many times they seem to be missing the forest for the trees. While financial analysis is crucial, we must not overlook the essence of learning. The true measure of educational investment isn't just in the dollars and cents but in its tangible outcomes: employment and employability, business and societal contributions by a better-educated general population and workforce, and the overall enhancement of our communities. These are just not addressed at all when we look at the "success" of these companies. Let's broaden our perspective and ensure that our investments in education, training, and learning lead to real-world benefits, shaping a society that's not only more knowledgeable but also more capable, equitable, and sustainable. #EducationInvestment #RealWorldOutcomes #BeyondFinance #FutureReady #SocietalImpact #futureoflearning #futureofeducation #digitallearning #education #training

#ByjusCrisis | Byju's faces hurdles as it breaches loan terms and grapples with legal disputes.📚💻 . . . #EdTech | #Byjus | #StartupDisputes | #ByjusLegalChallenges | #StartupNews | #EdTechCrisis Read👇🏼 https://lnkd.in/g2Wni5A6

Embattled edtech giant, BYJU'S, is facing a major legal challenge as its lenders have filed for insolvency proceedings against three of the company's guarantors in the Delaware district bankruptcy court in the US. The lenders, a group of over 100 institutions that provided Byju's Alpha (a subsidiary of Byju's) with a $1.4 billion term loan, are alleging that these entities are not paying their debts. In a scathing statement, the lenders have accused Byju's management of "unlawfully diverting $533 million in loan proceeds, the whereabouts of which are still unknown". In a parallel development, the National Company Law Appellate Tribunal (NCLAT) in India has dismissed a petition filed by certain foreign investors of Byju's. These investors had sought an order against the ongoing proceedings in the Bengaluru bench of the National Company Law Tribunal (NCLT). The NCLAT bench made it clear that as an appellate court, they cannot intervene in matters that are "yet to mature" in the NCLT. The court also sternly rebuked the investors' counsel, stating that they cannot "misuse the appellate jurisdiction" and that the investors had not even formally filed an application or affidavit regarding the alleged breach of the interim order by Byju's. Moving forward, the Byju's case will likely set precedents and serve as a benchmark for how similar disputes are handled in the edtech industry. It will be crucial for companies, regulators, and industry bodies to closely monitor the developments and draw valuable lessons to strengthen the overall ecosystem. Link - https://lnkd.in/diKVsKqZ By Karan Karayi #byjus #unacademy #india #vedantu #upsc #ssc #startupindia #neet #currentaffairs #instagram #education #ola #bhfyp #oyo #adda #zomato #oyorooms #ssccgl #memes #follow #olacabs #indianstartups #covid #memesdaily #gradeup #softbank #generalknowledge #testbook #jee #startup

Big breaking news Earlier this month, Byju’s Alpha filed for chapter 11 in the U.S. Bankruptcy Court for the District of Delaware, directed by a designee of lenders to the company’s $1.2 billion term loan B, or TLB. A majority of the lenders have also filed a petition in the National Company Law Tribunal in India, or NCLT, against Byju’s parent Think & Learn, seeking an in-court debt resolution. With the company’s founders facing a growing risk of losing control of the business, Byju’s has launched a $200 million rights issue for Think & Learn to retire “immediate liabilities” and meet operational expenses. It remains to be seen who would invest in the unlisted company’s equity at a moment when some of its existing high-profile investors have written down its valuation by as much as 95%, and are clamoring for a change in leadership. While a rights issue could, under certain circumstances, be an opportunity for the promoters of the trouble education tech firm to increase their control, the source of funding to subscribe to the issue may be questioned by the TLB lenders, who are litigating in multiple U.S. courts to trace $533 million, allegedly transferred by Byju’s promoter to a hedge fund not registered under the U.S. federal securities laws. For the TLB lenders, given the delays faced in admitting petitions into the NCLT, and the slow progress of court cases in India, the struggle has only begun. #finance #acccounting #fundaccounting

The challenges faced by Byju's, as described, suggest a combination of strategic, operational, and financial missteps. The top five mistakes that may have contributed to its current situation are: 1. Overexpansion and Unsustainable Growth: Byju's rapid growth, fueled by aggressive marketing and acquisitions, may have outpaced its ability to sustainably manage and integrate its expanding operations. This overexpansion can strain resources and lead to inefficiencies. 2. Financial Management Issues: The cash crunch and the delay in sharing audited financial results for FY23 indicate potential issues in financial management. Reliable financial reporting is crucial for investor confidence and operational stability. 3. Dependency on External Funding: Relying heavily on external investors for capital can be risky. When investors hesitate to infuse more funds, as in Byju's case, it can lead to significant operational and financial challenges. 4. Governance and Leadership Challenges: Concerns about Byju Raveendran's control over the company's operations, as indicated by investor conditions, suggest possible governance issues. Effective leadership and governance are essential for guiding a company through crises. 5. Regulatory and Legal Challenges: The show cause notice from the Enforcement Directorate for alleged FEMA violations and the insolvency plea by BCCI for sponsorship payment defaults add legal and regulatory pressures. Such issues can distract from core business operations and damage reputation. Addressing these issues would require a comprehensive strategic review and potentially significant changes in Byju's business model, governance, and financial management practices.

The American arm of Byju's, named 𝗔𝗹𝗽𝗵𝗮 𝗜𝗻𝗰., has filed for bankruptcy due to a $1.2 billion debt default. This decision came in the wake of efforts by significant investors to remove the co-founder and CEO, Byju Raveendran. The court-appointed CEO, Timothy Pohl, initiated Chapter 11 bankruptcy proceedings in a Delaware Court as the company lacked funds for legal defence against lawsuits. Alpha Inc. has assets valued between $500 million to $1 billion and between 100 to 199 creditors. The bankruptcy filing is a result of mounting issues for the online tutoring company. Key investors, including General Atlantic and Prosus Ventures, pushed for leadership changes and a board restructuring. Experts believe that the Chapter 11 filing will protect Byju's American assets from lenders in India and give the company time to develop a plan to repay creditors. During Chapter 11 proceedings, the company can continue operations under court supervision while negotiating debt repayment and restructuring. Amid Byju's aggressive expansion in 2020 and 2021, including the acquisition of 10 companies, Alpha Inc. received $1.2 billion from lenders but faced issues when it couldn't secure WhiteHat Jr. as a guarantor for the loan. Glas Trust took control of Alpha and alleged that funds were transferred “to conceal the whereabouts" of the cash. Earlier this year, lenders of Byju’s also submitted a petition for insolvency against its parent entity, Think & Learn Pvt. Ltd., before the Bengaluru bench of the National Company Law Tribunal, citing instances of default on loans. #byjus #alphainc #bankruptcy #chapter11 #insolvency #usa #update #internationalnews

Fierce head winds, meet fierce interest rates. Edtech giant, Byju's, is set to potentially pay an additional $50-60 million every year in interest on its $1.2 billion term-loan. This is part of new terms with lenders, according to insiders. Well, in the rapidly evolving edtech space, where innovation and agility are key, such substantial financial commitments can divert critical resources away from R&D and growth initiatives. It can lead to a slower pace of innovation, which is not ideal in an industry that thrives on being at the cutting edge. Don't get me wrong, the lesson is- securing funding is crucial for expansion, but not at the cost of stifling innovation or slowing growth. It's a delicate balancing act and one that needs to be navigated wisely. Here's hoping Byju's charts its course strategically, maintaining its growth trajectory whilst dealing with these new financial challenges. Read more about it here: https://lnkd.in/dZdZizqw

#StartupWithMC | Byju's founders, top executives, and advisory council updated investors on Term Loan B negotiations, audited results, and other issues Chandra R Srikanth reports👇 #Byjus #Audit #Investment