Byju's US arm files for bankruptcy

Byju’s Alpha, the U.S. arm of Indian edtech Byju’s, is grappling with financial woes. It has filed for bankruptcy due to a staggering default on $1.2B of debt, as reported by Bloomberg.

• A Struggle for Funds: Timothy Pohl, the CEO of Byju's U.S. entity, admitted that the division didn't have the necessary capital to settle disputes with its parent company concerning the financial shortfall.

• Legal Proceedings: The company is also preparing for legal proceedings against a small hedge fund based in Florida. It's alleged that the fund played a part in obscuring over $500M in cash – funds Byju’s Alpha contends should have been allocated to creditors.

• Asset Disclosure in Filings: Amid the financial turbulence, Byju's Alpha has indicated in its bankruptcy disclosures that it possesses assets valued at a minimum of $500M – yet it faces liabilities surpassing $1B.

• Investor Concerns and Leadership Changes: Investors are sounding the alarm, pushing for an overhaul at the top of Byju’s hierarchy and a revamped board of directors as they navigate through this challenging period.

Meanwhile, Think and Learn, the umbrella firm for Byju’s, announced its intent to raise approximately $200M through a rights issue. This move is aimed at bolstering growth prospects and achieving a stable operational stance.