Byju's, an edtech company based in New Delhi facing various controversies and financial difficulties, has filed a case in the Karnataka High Court challenging the National Company Law Tribunal's decision to stop its second rights issue.
The start date of the second rights issue was May 13 with a planned end date of June 13. The NCLT has prohibited the Ed-tech company from using funds from the second rights issue. Sources indicate that the company is expected to present a new request in the Karnataka High Court, which is scheduled to be heard on Monday.
Byju's is considering reaching out-of-court resolutions with two creditors, Teleperformance and Surfer Technologies. The NCLT postponed the cases until June 26. The company is encountering several challenges, in both India and the US, with regards to its subsidiary.
Previously valued at $22 billion, the Ed-tech company's current value is cited as zero in a recent research note from financial institution HSBC. HSBC valued investment firm Prosus' almost 10 per cent ownership in Byju's at zero, equivalent to approximately $500 million.
According to the note, we do not consider Byju's stake to have any value due to numerous legal cases and financial difficulties. At the beginning of this month, a coalition of creditors filed a lawsuit in a US court seeking to declare bankrupt newly established companies linked to Byju's American branch, claiming they were avoiding their financial obligations.
Byju's Alpha sought Chapter 11 bankruptcy protection in the US in February 2024. The company successfully completed the processing of May employee salaries using monthly "collections".