The whole issue primarily stems from the fact that BYJU'S was unable to pay back its loans and had to renegotiate its credit agreement following a breach of investor protections over the missed deadline to reveal annual financial results. 
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The whole issue primarily stems from the fact that BYJU'S was unable to pay back its loans and had to renegotiate its credit agreement following a breach of investor protections over the missed deadline to reveal annual financial results. BYJU’S subsidiary Alpha Inc., which is based out of the US, is non-operative with no employees, said the edtech giant. The company also called the claims of the litigants “bewildering.” In a statement, the company said, “This is an interim order of a Delaware Court to maintain status quo in relation to the management of BYJU’S Alpha, a non-operative US entity, with no employees. The litigants have made bewildering claims that BYJU'S “moved” $500 million from BYJU'S Alpha, insinuating that these acts were somehow wrongful.”
For the unversed, Alpha has been sued in the Delaware court in relation to recovery of the $1.2 billion loan which was taken by the edtech major in 2021. Bloomberg was the first to report the development. The agency reported that Alpha Inc hid $500 million as part of a fight between creditors and the company.
The suit was lodged by Glas Trust Company and investor Timothy R. Pohl, naming BYJU'S Alpha, Tangible Play, Inc., and Riju Ravindran as defendants. Ravindran is the director of Alpha Inc. The lawsuit has been filed in the Delaware Chancery Court in Wilmington.
The company also said that it has fulfilled all contractual “payment obligations under the Term Loan B” and has not defaulted on any payments.
“There have been no monetary defaults under the loan. In fact, the lenders' allegations, which we also dispute, concern merely insignificant technical and non-monetary defaults,” the company said.
Business Today reported earlier that the company has raised $250 million from US investment firm Davidson Kempner Capital Management. This is a part of its ongoing $1-billion funding round, sources told BT.
It is interesting to note here that while the company has been mum about the fundraise, it has now confirmed the development without giving too many details about the funding round. “The successful completion of a recent funding round of $250 million further reinforces our financial stability and serves as a testament to the unwavering confidence that investors have in our business,” he said.
BYJU’S has also reiterated that Alpha’s funds were transferred to other entities for global expansion and to meet other growth-related plans.
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