Byju's, once most-valued startup, enters bankruptcy
Writer Admin
BENGALURU/MUMBAI: The National Company Law Tribunal on Tuesday initiated insolvency proceedings against edtech company Byju's parent Think & Learn following a plea by cricket body BCCI, marking a dramatic collapse of what was once India's most valuable startup at $22 billion.
The tribunal has appointed Pankaj Srivastava as the interim resolution professional who will work with creditors to seek a resolution applicant for the company.
Byju's is likely to challenge the decision in the National Company Law Appellate Tribunal. "As we have always maintained, we wish to reach an amicable settlement with BCCI, and we are confident that, despite this order, a settlement can be reached. Our lawyers are reviewing the order and will take necessary steps to protect the company's interests," a company spokesperson said in a statement.
The latest blow to the Bengaluru-based startup, whose founder is now overseas, relates to outstanding dues of Rs 159 crore it owed to the cricket body over a title sponsorship rights deal struck in 2019. Earlier this year, Byju's had filed an application to refer its dispute with the BCCI to an arbitrator but the NCLT dismissed it. Last year, the BCCI had dragged the startup to NLCT for non-payment of sponsorship money.


Byju's had replaced Oppo India as the official team India sponsor in 2019. The initial deal period was from Sept 2019-March 2022. In June 2022, Byju's had extended its jersey sponsorship agreement with BCCI until Nov 2023 for an estimated $35 million. While Byju's wanted to terminate its agreement with the BCCI from Dec 2022, the board wanted it to continue until March 2023 so that new sponsors could come in from the new financial year.

The decision comes as a setback for investors too, many of whom such as Prosus had written off their investment, as the company will be taken over by a new entity called a resolution applicant. It will be managed by a committee of creditors with the management and the shareholders having no say. Byju's debtors will have to wait for resolution to recover their dues. A failure to find a resolution applicant will push the company into liquidation.


BCCI, which is an operational creditor, will get its claims, or a part of it, only after wages and financial creditors are paid. Typically, only a chunk of the claims admitted by the resolution professional have been realised with service sector companies seeing lower value.


Byju's is already under pressure from investors, a majority of whom had voted to oust founder Byju Ravindran as CEO in February.


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