 "Byjus vs BCCI row: Edtech firm seeks to settle debt with cricket board")
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 proceedings.
Byju’s has “almost resolved” the matter with 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 company told the National Company Law Appellate Tribunal at a hearing. The NCLAT will next hear the matter on Wednesday. Tushar Mehta, a lawyer for cricket’s governing board in India, said the BCCI is in settlement talks with Byju’s. MZM Legal LLP represented Byju Raveendran in court.
The BCCI still has to tell the court formally that it will withdraw the bankruptcy case against Byju’s.
Any decision to withdraw insolvency proceedings by the BCCI throws a lifeline to the former tech high-flyer now grappling with a cash-crunch after business sagged, post-Covid. An Indian companies’ court this month pushed Byju’s, officially Think & Learn Pvt., into insolvency after the startup 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.
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.
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