An Indian appeals tribunal stopped bankruptcy proceedings against troubled educational technology firm Byju on Friday after the company agreed to settle a $19-million unpaid sponsorship debt owed to the country鈥檚 powerful cricket board.
Byju鈥檚, once one of India鈥檚 most hyped start-ups, rode a boom in demand for online learning products during the coronavirus pandemic but crashed hard after locked-down students returned to classrooms. The ruling provides some relief to the company, which was once valued at more than $20 billion but has since seen its valuation crash by an estimated 90 per cent.
A lower tribunal had last month pushed Byju鈥檚 into insolvency after the Board of Control for Cricket in India (BCCI) claimed an unpaid debt of 1.59 billion rupees ($19 million) for sponsoring the jerseys of the Indian team during international cricket matches.
The firm had filed an appeal against the National Company Law Tribunal bankruptcy order, but also worked out a settlement with the cricket board.
On Friday, the National Company Law Appellate Tribunal in Chennai approved the settlement between the BCCI and Byju鈥檚 and set aside the earlier order from last month.聽聽
鈥業n view of these facts, the settlement is hereby approved and the appeal succeeds and the impugned order is set aside,鈥� local media quoted the NCLAT as saying.
Byju鈥檚 hailed the ruling as a 鈥榤ajor victory鈥� in a statement, adding the company鈥檚 teams would 鈥榗ontinue to work hard to strengthen stakeholder confidence and reinforce their commitment to serve millions of students.鈥�