The National Company Law Appellate Tribunal (NCLAT) has disposed of a petition filed by Riju Ravindran seeking to block lenders of troubled edtech startup BYJU’S from deciding on a INR 158 Cr settlement with the Board of Control For Cricket In India (BCCI).
This is a major blow to BYJU’S as its settlement proposal will now be placed before the Committee of Creditors (CoC), comprising GLAS Trust and Aditya Birla Finance, which have been against the settlement from the beginning.
The NCLAT was hearing a plea filed by Ravindran, former promoter of BYJU’S, against the order by the Bengaluru bench of NCLT, which had on February 10 directed the BCCI to withdraw its insolvency plea against BYJU’S and place it before the CoC for approval.
BYJU’S Fate Now In Hands Of Creditors
Siding with the NCLT order, the Chennai bench of the Appellate Tribunal NCLAT said yesterday that since the CoC had already been formed when the settlement was arrived at with the BCCI, the creditor’s committee is at liberty to accept or reject it.
“During the course of the proceedings before this Court, the CoC has been constituted. The parties are at liberty to invoke their remedies, to seek a withdrawal or settlement of claims, in compliance with the legal framework governing the withdrawal of CIRP,” said the court order.
This essentially means that BYJU’S fate now hangs in the balance. It now needs approval from GLAS Trust and Aditya Birla Finance for its proposed INR 158 Cr outside-the-court settlement with the BCCI to escape insolvency proceedings.
Notably, GLAS Trust, a consortium of US lenders that gave a $1.2 Bn term loan to BYJU’S, has a voting share of 99.41% in the CoC based on its admitted claim of INR 11,432 Cr.
GLAS had previously opposed the settlement, saying the money paid to the BCCI was “tainted” and a case of “round tripping”.
(The story will be updated soon)
The post In A Blow To BYJU’S, NCLAT Says Creditors Have ‘Liberty’ To Decide On INR 158 Cr Settlement With BCCI appeared first on Inc42 Media.
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