Edtech Firm Byju’s Seeks To Settle Debt With BCCI
By Tuesday evening, Byju’s had transferred Rs 50,000 crore to BCCI, according to people familiar with the matter.
(Bloomberg) -- Byju’s is in talks to settle the dues it owes India’s cricket governing body, lawyers for both sides told a court Tuesday, raising the prospect that the online tutoring startup may resolve a key dispute and avert insolvency.
Byju’s has “almost resolved” a dispute over unpaid fees to the Board of Control for Cricket in India and will pay “a certain tranche of the money” by this evening, Arun Kathpalia, a lawyer representing the edtech firm told the National Company Law Appellate Tribunal during a hearing. A lawyer for BCCI also said in court both parties were engaged in settlement talks. The NCLAT will next hear the matter Wednesday.
By Tuesday evening, Byju’s had transferred 500 million rupees ($6 million) to the cricketing overseer, according to people familiar with the matter, who declined to be named as the information is private.
The payment is a first step toward resolving a disagreement that’s clouded the prospects of a once-prominent startup. A lower court this month pushed Byju’s, officially Think & Learn Pvt., into insolvency after it couldn’t pay the BCCI 1.59 billion rupees ($19 million). It also appointed an interim resolution professional, effectively taking away control of the company from founder Byju Raveendran.
A decision to withdraw insolvency proceedings would throw a lifeline to the former tech high-flyer, now grappling with a cash-crunch after business sagged in Covid’s aftermath. The BCCI has to inform the court formally before withdrawing its case.
Phone calls and an email sent to BCCI went unanswered outside of normal business hours, while a representative for Byju’s declined to comment.
Byju’s, a poster child for India’s burgeoning startup economy, is fighting to remain in business after its cash dried up and legal challenges mounted. The insolvency plea initiated by the cricket board is one of several bankruptcy cases Byju’s is fighting in India and abroad.
Founded by school teacher Byju Raveendran, the firm was valued at $22 billion at its peak. Business surged during the Covid-19 pandemic, turning Raveendran into a billionaire. Quick overseas expansion coincided with the company’s expensive marketing blitz — it sponsored the India cricket team, while signing up Bollywood star Shah Rukh Khan and footballer Lionel Messi as brand ambassadors. But as coronavirus infections subsided and schools re-opened, the startup’s cash pile shrank and it ran into legal problems in the US as well as its domestic market.
Raveendran’s rise once captivated a nation enamored of charismatic tech entrepreneurs. But focus has recently turned on his rigorous efforts to keep Byju’s running, including pledging his home to pay staff. The firm has also sold new stock at a discount of more than 90% from its previous funding round to raise capital. An Indian court, however, has barred it from using that money.
Major backer Prosus NV in June disclosed it had written down the value of its 9.6% stake in Byju’s to zero. Prosus was among investors attracted by the promise of a new style of education gaining users in the country of 1.4 billion people and abroad, along with Mark Zuckerberg’s Chan-Zuckerberg Initiative, Tiger Global Management and private equity giant Silver Lake Management.
(Updates to add Byju’s payment in the third paragraph)
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