Byjus, formerly valued at USD 22 billion, is facing insolvency proceedings after failing to pay the BCCI Rs 158.9 crore. The National Company Law Tribunal (NCLT) in Bengaluru has approved the bankruptcy procedures. Interim resolution specialist, NCLT Pankaj Srivastava informed this. This ruling suspends the board of directors and freezes the company’s assets.
Byju Raveendran, the founder and CEO, will now report to an interim resolution professional. Byjus has formerly sponsored the Indian cricket team. Despite the NCLT’s judgment, Byju remains optimistic about resolving with the BCCI. A spokeswoman for Byjus said: “As we have always maintained, we are interested in reaching a compromise with BCCI, and we are confident that, despite this order, a settlement can be reached.”
Byjus’ Financial Struggle
The company’s financial woes began two years back when it missed financial reporting deadlines and fell more than 50% short of revenue estimates. BlackRock has cut Byjus’ valuation to $1 billion. The reopening of schools once pandemic restrictions were lifted contributed to the company’s collapse. In February, investors in Byjus’ parent firm, Think & Lean (T&L), including Prosus and Peak XV, voted to oust Raveendran as CEO during an extraordinary general meeting (EGM).
- Advertisement -
They raised claims of mismanagement and failure. Raveendran has dismissed the charges and questioned the authenticity of the ballots.
Unpaid dues and bankruptcy proceedings. However, the ensuing invoices remained unpaid. A bank guarantee of Rs 143 crore was encashed, but it was insufficient to cover the full sum owed.
The sponsorship money for series and tours encompassing South Africa, Australia, Sri Lanka, New Zealand, the Asia Cup, and the ICC T20 between August 2022 and January 2023 is still outstanding at Rs 158.9 crore. The NCLT order held that it is uncontested that Byjus used BCCI’s services but failed to pay the agreed-upon amount despite acknowledging the dues. Instead, Byjus continually demanded payment extensions from the BCCI.
Byjus intends to dispute the NCLT ruling before the appellate body, NCLAT, while its lawyers evaluate the current order. In the face of persistent legal disputes with investors and operational issues, the corporation seeks to safeguard its interests. The outcome of these proceedings will have a substantial impact on Byjus’ future operations and financial stability as it navigates this trying moment.
