BYJU’S’ US unit Alpha files for bankruptcy amid growing challenges: Report

BYJU'S Alpha—a wholly-owned subsidiary of the edtech firm—has reportedly filed for Chapter 11 bankruptcy proceedings in the US Court of Delaware amid growing challenges for the Byju Raveendran-led firm.

The Bengaluru-based edtech company’s US unit has listed liabilities in the range of $1 billion to $10 billion and assets in the range of $500 million to $1 billion, Reuters reported, citing a court filing, which showed estimated creditors in the range of 100 to 199.

The bankruptcy proceedings in the US court come a week after BYJU’S’ lenders—who collectively own more than 85% of its $1.2-billion term loan B (TLB)—filed an insolvency petition against the edtech firm with the National Company Law Tribunal in Bengaluru. BYJU’S Alpha raised the TLB in November 2021.

For over a year, BYJU’S and its lenders have been embroiled in a conflict, with multiple rounds of negotiations to amend the TLB agreement. Both parties were expected to finalise a term loan amendment before August 3, 2023.

Last September, YourStory reported that the edtech company was exploring the sale of two of its assets—Epic and Great Learning—to generate at least $800 million to repay the debt tied to $1.2 billion TLB.

BYJU’S’ growing challenges

Meanwhile, on Thursday, several major investors in BYJU’S issued a notice to its parent company Think and Learn Private Limited (TLPL) requesting an extraordinary general meeting (EGM) to address persistent issues.

Proposed resolutions for the EGM include addressing governance, financial, and compliance issues; restructuring the Board to reduce founder control, and changing the company’s leadership.

Earlier this week, the board of TLPL launched a rights issue to raise $200 million, seeking to finance current capital expenditures and provide support for general corporate purposes.

BYJU’S, which rapidly grew through strategic acquisitions, encountered significant challenges post the pandemic-led edtech boom, including a severe liquidity crunch.

In a separate development, the edtech firm has yet again failed to pay salaries to its employees for January. 

YourStory has reached out to BYJU’S for comments on the pending salaries.

Employees faced a similar delay in November salaries, which affected about 1,000 workers at the edtech company. At that time, the company acknowledged a delay in the processing of the salary for some of its employees.