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MUMBAI: Troubled edtech startup Byju’s on Tuesday said that the $533 million it received from foreign lenders as part of a $1.2-billion term loan B has been parked with a non-US subsidiary of the firm and not “siphoned off“.
Four of Byju’s investors had recently argued in a court that the company has siphoned off $533 million and sought a stay on the firm’s rights issue.
Although the court allowed Byju’s to go ahead with the issue, it disabled the company from using the funds raised through the issue – a move which the cash-starved company said has hindered disbursement of salaries to employees. The funds ($533 million) have also been a point of dispute between the firm and its lenders.
The startup, in a statement, added that hedge fund Camshaft Capital is no longer managing the $533 million. Bloomberg on Tuesday reported that the lenders have accused Camshaft’s founder of helping Byju’s hide $533 million from them.
“Camshaft, in its disclosure to the Delaware bankruptcy court earlier this week, confirmed that the money was transferred to a 100% subsidiary of Byju’s. It is consistent with Byju’s position that the group entities remained the beneficiary holders of the money,” the company said in a statement.
The lenders have also dragged Byju’s to the NCLT over its failure to repay the debt. The startup had set up a US-based entity Byju’s Alpha to receive the loan proceeds. The firm said that Byju’s Alpha had initially appointed Camshaft to manage its funds. “There was nothing improper about this…The above disclosure should also dispel any suggestion that these funds are being siphoned off,” the company said.
Four of Byju’s investors had recently argued in a court that the company has siphoned off $533 million and sought a stay on the firm’s rights issue.
Although the court allowed Byju’s to go ahead with the issue, it disabled the company from using the funds raised through the issue – a move which the cash-starved company said has hindered disbursement of salaries to employees. The funds ($533 million) have also been a point of dispute between the firm and its lenders.
The startup, in a statement, added that hedge fund Camshaft Capital is no longer managing the $533 million. Bloomberg on Tuesday reported that the lenders have accused Camshaft’s founder of helping Byju’s hide $533 million from them.
“Camshaft, in its disclosure to the Delaware bankruptcy court earlier this week, confirmed that the money was transferred to a 100% subsidiary of Byju’s. It is consistent with Byju’s position that the group entities remained the beneficiary holders of the money,” the company said in a statement.
The lenders have also dragged Byju’s to the NCLT over its failure to repay the debt. The startup had set up a US-based entity Byju’s Alpha to receive the loan proceeds. The firm said that Byju’s Alpha had initially appointed Camshaft to manage its funds. “There was nothing improper about this…The above disclosure should also dispel any suggestion that these funds are being siphoned off,” the company said.
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