SC Challenges Byju's: What is Byju's Survival Plan?

Indian education business Byju's owes a lot of money to many people and institutions. It still owes a lot more to others, even if it paid off the Indian Cricket Board, or BCCI, less. The question raised by the Supreme Court to Byju's is why they paid the BCCI before the others. They want to know if something seems suspicious or if anything is off. There has been no clear explanation given by Byju's regarding this. Byju's must explain its acts and determine how to repay its debts. Byju's owes different debtors an astounding Rs 15,000 crore, or around $1.8 billion. The Rs 158 crore that was settled with the BCCI is included in this sum. It's uncertain right now if Byju's can pay their loan in full. The business must implement efficient plans to meet its responsibilities because it faces severe financial difficulties. The precise whereabouts of the money that Byju's gained is still up for debate and investigation. There are a few assumptions, but it's hard to identify exactly where the funds went without concrete proof.

How well Byju can repay its loans depends on several essential things

It may be required to engage in financial restructuring. That means renegotiating terms with creditors or restructuring current obligations to make them more manageable and consistent with the business's cash flow. Byju's has been trying this strategy to survive. Byju's may also look to outside investors or lenders for loans to pay off its debts, providing instant relief and money to keep running its business. They have received a small amount of funding for the business to keep running even though they are not making any profits as teachers have also left. Cost-cutting measures will probably be necessary to manage this. But there's a significant danger associated with legal action. The results could negatively affect Byju's capacity if regulatory measures are brought. Reducing operating expenses can strengthen the company's financial situation and free up funds for debt repayment. Byju must maintain its financial position by raising liabilities or taking money away from debt settlement. These elements will impact the business's approach and overall capacity to overcome financial obstacles.

The National Company Law Appellate Tribunal's (NCLAT) decision to end the insolvency process against the edtech company Byju's was called into doubt by the Supreme Court on Wednesday.

"The corporation owes Rs 15,000 crore in debt. Can one creditor (BCCI) walk away saying one promoter is willing to pay me when the debt is so significant? the CJI questioned.

"Why pick up BCCI and settle with them only from your assets," the court stated. "The NCLAT accepts this all without applying its mind to it." The distressed ed-tech company received a reprieve on 2 August from the NCLAT, which revoked the insolvency proceedings against it. This decision was made after approval of the payment of its outstanding debt to the Board of Control for Cricket in India (BCCI) of Rs 158.9 crore.

The Indian Cricket Board, or BCCI, is one entity Byju's owes money to

Byju's said they might use funds from one of the business owners to reimburse the BCCI. The Supreme Court seems perplexed about this. They question why, given how much money they owe everyone else, Byju's is repaying the BCCI first. They believe that the NCLAT, a court that handles troubled enterprises, failed to consider this issue adequately. According to the NCLAT's recent ruling, Byju's is exempt from bankruptcy due to their payment of the BCCI. However, the Supreme Court is currently contesting this ruling. Byju's founder, Byju Raveendran, regained control with the decision, which was a significant win. Sadly, this relief was short-term, as on 14 August, the higher court declared the NCLAT ruling to be "unconscionable" and suspended its implementation. Byju's and other creditors received notices in response to the appeal against the verdict of the insolvency appeal tribunal filed by Glas Trust Company LLC, the company's US-based creditor.