Udaan's S'pore Holding co faces insolvency proceedings over $170 mn default

Creditors filed a winding-up petition after debt-restructuring talks collapsed; Udaan says the proceedings are limited

Global creditors of IPO-bound business-to-business e-commerce company Udaan have reportedly initiated insolvency proceedings against Trustroot Internet Pvt. Ltd., the company's Singapore-based holding entity, after it defaulted on $170 million of compulsorily convertible notes that matured on June 30.

 

Creditors have appointed Alvarez & Marsal as liquidator in insolvency proceedings before the Singapore High Court after failing to reach an agreement with the company on a debt-restructuring package, according to the sources. They filed a winding-up petition on Tuesday.

 

However Udaan said the legal proceedings are limited to its offshore holding company and have no impact on its operations in India.

 

“The matters referenced relate to ongoing restructuring negotiations and offshore proceedings among offshore stakeholders at the offshore holding company level,” said the company. “These discussions have no bearing on our operating entities in India, where our teams employ our people and run the day-to-day business.”

 

The company said Udaan and UdaanCapital continues to operate as usual, serving customers across trade commerce and supply chain financing. “We will continue to focus on delivering value to our customers, partners, employees and stakeholders,” said Udaan.

 

Legal firms involved in the discussions said the dispute is confined to Udaan's Singapore-based holding company and is essentially a shareholder-level matter. They said unsecured creditors are seeking rights and recoveries comparable to those of long-term investors and secured lenders, including Lightspeed Venture Partners, M&G and Moonstone, as part of the restructuring process, a move they said has been opposed by those investors.

 

The experts argued that the insolvency proceedings are being used by unsecured creditors to strengthen their negotiating position and seek more favorable recoveries than they would ordinarily be entitled to. They added that the proceedings have no impact on Udaan's India operations because the Indian business is housed in a separate legal entity and continues to operate as usual.

 

“Under Singapore's insolvency framework, secured lenders have priority over unsecured creditors in a receivership or liquidation,” a legal expert involved in the discussions said. "Long-term investors such as Lightspeed, M&G and Moonstone would rank ahead of unsecured lenders, which is why the latter are using the court process to strengthen their negotiating position.”

 

Udaan is also working with Goldman Sachs to raise $150 million to $200 million in equity and exploring a separate $40 million financing facility backed by pledged shares, according to the sources. It recently raised $50 million to $60 million from existing investors, including M&G Prudential and Lightspeed Venture Partners.

 

Udaan, backed by Lightspeed Venture Partners, DST Global and Tencent, has reportedly racked up about ₹13,000 crore in cumulative losses since it was founded. Fiscal 2025 revenue fell 20 per cent to ₹4,561 crore, while net loss narrowed 37 per cent to ₹1,055 crore.

 

The Udaan case adds to a series of cross-border legal disputes involving Indian startups and their Singapore holding companies. Earlier this year, a Singapore court found Byju Raveendran in contempt over non-compliance with asset-related court orders before later staying parts of the order pending further proceedings.

 

The dispute also recalls the legal battle between Anupam Mittal and WestBridge Capital, where a shareholder dispute involving People Interactive, the parent of Shaadi.com, triggered parallel proceedings in India and Singapore over whether the matter should be resolved through arbitration or Indian company law.