The National Company Law Tribunal (NCLT) on July 16 disposed of the insolvency plea filed by the United States of America-based lenders of embattled edtech company Byju's in light of the company already being admitted to insolvency.
The tribunal directed the lenders to file their claim before the Interim Resolution Professional (IRP) appointed to look into the day-to-day operations of Byju's. The order stated, "The instant C.P (case) is disposed of by granting liberty to the Petitioner (lenders) herein to put-forth their
claim before the IRP in accordance with the provisions of the IBC 2016 and the Regulation made thereunder."
However, the lenders have been allowed to revive the plea depending on the
subsequent developments in the case if the erstwhile management of the company files an appeal.
Earlier today, NCLT admitted Byju's parent Think and Learn to insolvency resolution process in a plea filed by the Board of Control for Cricket in India (BCCI).
The tribunal has appointed Pankaj Srivastava as the interim resolution professional, in charge of running the company till the lenders form a committee known as the Committee of Creditors (CoC).
As per the IBC, the control of the company will now be taken from the current management and will be given to the creditors of the company. Furthermore, no assets of Byju's can be transferred while the company is in CIRP. IBC also prohibits the institution of any suits or pursuing of any existing cases against Byju's.
The company is now under moratorium, which means all its debt and interest on debt will remain frozen till its lifted by the NCLT through an order. The CoC will now run the company through the IRP/RP for a maximum period of 330 days. If the CoC is able to sell the company to an interested party through a bidding process, the company could be revived. However, if the CoC fails to find a buyer in the 330 days, the NCLT will order the company to be liquidated.
The US lenders filed their plea through non-bank loan agency Glas Trust Company LLC . Glas trust is the administrative agent for the lenders and collateral agent for the secured parties. The company represents foreign lenders, who collectively extended more than 85 percent of Byju’s $1.2-billion term loan to Byju's.
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