Byju’s Lenders Move to Put Singapore Unit in Receivership

(Bloomberg) --

A lender-appointed receiver has taken steps to assume control of a Byju's unit in Singapore following months of failed negotiations with what was once one of India's hottest tech startups, according to people with knowledge of the matter. 

The receiver, Kroll Pte. Ltd., said in a statement that it appointed two restructuring experts “to safeguard the charged assets” of Great Learning Education Pte. Ltd. and Byju's Pte. Ltd. 

Lenders to the online tutoring firm were told this week that Kroll placed the professional training and higher education platform into receivership in Singapore and replaced certain Byju's board members with representatives from Kroll, the people said, asking not to be named because the matter is private. 

Great Learning, which Byju's bought for $600 million in 2021, may now be sold. 

Byju's and its creditors have been mired in a prolonged restructuring conflict after the firm breached covenants on a $1.2 billion loan. The company decided to miss an interest payment on the term loan, one of the largest by a startup globally. 

The standoff marks a reversal for the firm's eponymous founder Byju Raveendran, whose ascent from tutor to the leader of a $22 billion company captivated investors. 

As business boomed during the pandemic, Byju's went on an acquisition spree to expand globally, acquiring Singapore-based Great Learning. 

But demand for online tutoring dropped off as schools reopened. Byju's board members have resigned and many teaching centers are nearly empty. Byju's has been looking to sell units, including Great Learning, to raise funds as part of a broader turnaround plan. 

Kroll said it appointed Cosimo Borrelli and Jason Aleksander Kardachi to oversee the assets “as part of the secured lenders' exercise of their security rights following defaults by BYJU's Alpha Inc.” Borrelli serves as Kroll's global co-head of restructuring, while Kardachi leads the company's restructuring work in Singapore and South East Asia. 

Mohan Lakhamraju, the founder and chief executive officer of Great Learning, is continuing to lead the company, according to Kroll's statement. Lakhamraju had no further comment, his representative told Bloomberg. 

A representative for Byju's said the firm was working with partners, including Great Learning management and creditors, “for a potential divestment of the company at optimal value.” 

“This, we believe, will allow Great Learning's future growth as an independent company,” the email said. 

A representative for Byju's lenders referred Bloomberg to Kroll's statement. A representative for Glas Trust didn't respond to requests for comment. 

--With assistance from Steven Church.

(Updates with Lakhamraju contact attempt in 10th paragraph)

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