India's Supreme Court has set aside a court ruling that stayed Bijoux's bankruptcy proceedings, a victory for U.S. creditors seeking to recover $1 billion from the once-proud education technology startup.
The Supreme Court of India on Wednesday ordered a stay on the decision of the National Company Law Appellate Tribunal that had recently approved a settlement plan with the Board of Control of Cricket in India (BCCI), which had suspended its insolvency proceedings. The apex court's order means that the proceedings will resume.
Wednesday's ruling is the latest in a series of crises for cash-strapped Bijoux, once India's most valuable start-up with a valuation of $22 billion.
The startup's troubles began several years ago but worsened when an Indian court launched bankruptcy proceedings last month after the company was unable to pay more than $19 million in debt to the BCCI, which wields great influence in India as the official body governing cricket, the country's most popular sport.
The Bijoux avoided legal action after its CEO's brother, Riju Raveendran, agreed to make the payment to BCCI. The appellate court subsequently dismissed the bankruptcy case.
US-based Glass Trust, which represents lenders to the Bijoux group of companies, had challenged the arbitration tribunal's decision, alleging that Riju Raveendran had used the lenders' capital to make payments to BCCI.
Bijoux raised more than $2.5 billion in 2020 and 2021, including a $1.2 billion Term B loan from a group of U.S. creditors. The company had aimed to go public in early 2022 at a valuation of more than $40 billion, but was forced to abruptly shelv those plans after Russia's invasion of Ukraine caused global markets to crash.
Byju's did not immediately respond to a request for comment.
The startup has spent the past two years putting out fires on nearly every front, problems that were exacerbated after it missed a financial reporting deadline and missed its 2022 revenue forecast by more than 50%.
Big investors including Prosus and Peak XV have alleged governance issues at the education technology company and have sought legal action to oust founder Biju Raveendran and take control of the company that has raised more than $5 billion in equity and debt.
Last year, the start-up's directors and auditors suddenly resigned in protest.
The conflict escalated when Byjoose lowered its valuation to $25 million and sought to raise capital through a share issue, sparking backlash from investors including Prosus, Peak XV, Sofina and the Chan Zuckerberg Initiative. The company was ordered not to use the proceeds from the share issue, and a second attempt to sell shares was blocked.
Prosus and BlackRock have written down the value of Bijoux's shares to zero.