US-based Glas Trust is not part of a panel in charge of the insolvency proceedings of ed-tech company Byju’s and will need to give an explanation on the $1 billion claim of lenders it represents, according to a report by Reuters citing documents and three sources.
Byju’s was a Bengaluru-based ed-tech giant and a favourite of global investors. It was valued at $22 billion in 2022. The company is currently facing insolvency due to its dispute with US lenders. Byju’s rose to fame by offering online training courses during the COVID-19 pandemic.
According to the report, Pankaj Srivastava, the insolvency officer had informed Glas in a letter on September 1 that a majority of the lenders it was representing have no business rights left as part of agreements with Byju’s, and it cannot stake a claim.
This was a setback for US lenders and hence the insolvency panel has been reconstituted without Glas Trust, the report said quoting three sources with direct knowledge of the matter, who spoke on condition of anonymity.
Additionally, Srivastava has asked Glas Trust to explain its stance and “provide supportive documents” in the letter in September, according to the report citing the letter, which is not in the public domain but is reviewed by Reuters.
US term loan lenders have released a joint statement on Wednesday, September 4 and informed the decision of not including Glas Trust in the insolvency panel “is completely wrong in law and in fact,” the report said.
Byju’s troubles
Bengaluru-based ed-tech company Byju’s was started in 2011. The company has been facing various challenges for some time, from boardroom exits and criticism of delayed financial results to the resignation of the auditor.
Mint reported earlier that the National Company Law Tribunal had deferred its decision on a plea by Glas Trust that requested a stay on further meetings of the committee of creditors appointed in Byju’s insolvency case. Reportedly, Glas Trust had provided a $1.2-billion Term Loan B to the Byju’s.
