BYJU's Term Loan Lenders and Agent Initiate Involuntary Chapter 11 Petitions Against U.S.-Based Guarantors Epic!, Neuron Fuel, and Tangible Play in Delaware Bankruptcy Court

The ad hoc group of term loan lenders (the "Ad Hoc Group" or "Lenders") of BYJU's Alpha Inc. ("Borrower") US$1.4 billion term loans ("Term Loans") announced today that certain holders of the Term Loans and GLAS Trust Company LLC (as administrative agent and collateral agent of the Term Loans) have filed petitions pursuant to Chapter 11 of the U.S. Bankruptcy Code to initiate involuntary Chapter 11 proceedings against Epic!, Neuron Fuel (DBA Tynker), and Tangible Play (DBA Osmo), the three U.S.-based guarantors of the Term Loans (collectively, the "U.S. Guarantors"), in the United States Bankruptcy Court for the District of Delaware (the "Court").

The Lenders issued the following statement: "Since BYJU's began to default on its Term Loan obligations shortly after we provided BYJU's Alpha with financing in 2021, we have made every effort possible to work productively and collaboratively to help BYJU's cure its multiple defaults. However, it is clear that BYJU's management has no intention or ability to honor its obligations under the Term Loans. Indeed, BYJU's founders, who also serve as the three directors of the overall enterprise?Byju Raveendran, Riju Ravindran, and Divya Gokulnath?unlawfully diverted $533 million in loan proceeds, the whereabouts of which are still unknown.

"As a result of BYJU's failed leadership and mismanagement, significant harm has been done to BYJU's businesses and the value of the Company's assets. Shareholders and lenders to the Company have seen the value of their investment deteriorate, employees and vendors have not been paid in a timely manner, and customers have suffered.

"Among other important goals, we have taken this action to protect and preserve the value of Epic!, Neuron Fuel, and Tangible Play. We remain committed to their success and stand ready to infuse the capital necessary to reorganize the businesses. Under supervision of the Court, the Lenders hope that Epic!, Neuron Fuel, and Tangible Play will benefit from much needed oversight while a plan is developed to maximize the value of these assets for the benefit of all stakeholders."

To assist in the Lenders' efforts, the Lenders invite former employees, students, and vendors of Epic!, Neuron Fuel, and Tangible Play to anonymously share their experiences, including whether they are owed any outstanding debt, in dealing with these businesses and their leadership by visiting www.ByjusBankruptcy.com.

Key Background and Timeline

• In 2021, BYJU's Alpha, Inc. was established as a U.S. subsidiary of BYJU's to receive proceeds of the Term Loans.
• BYJU's first breach occurred no later than March 16, 2022, when it failed to furnish required unaudited quarterly financial information.
• BYJU's then failed to provide audited financial statements and delayed its disclosure obligations by 18 months, and it failed to obtain a required guarantee from one of its subsidiaries.
• After months of unsuccessful attempts at negotiation, Lenders instructed their agent to exercise remedies on March 3, 2023, including accelerating the Term Loans and taking control of the pledged equity in BYJU's Alpha and then replacing Riju Ravindran, its sole director, with Timothy R. Pohl, an experienced restructuring professional.
• For months thereafter, Lenders sought to work collaboratively with BYJU's on a resolution that would have immediately solved for the Term Loans' acceleration and all open litigation. However, BYJU's exacerbated its defaults and repeatedly disregarded its Loan obligations.
• In October 2023, Kroll Pte. Ltd. was appointed to serve as a receiver to assume control of Singapore-based Great Learning Education Pte. Ltd. ("Great Learning Education"), a BYJU's subsidiary, and replace BYJU's board members with representatives from Kroll.
• In November 2023, the Delaware Chancery Court recognized that BYJU's had defaulted on its loan obligation.
• In January 2024, Lenders initiated corporate insolvency resolution proceedings against Think & Learn Pvt Ltd (doing business as BYJU's) before the Bengaluru Bench of the National Company Law Tribunal in India (such proceedings being the "BYJU's CIRP").
• In February 2024, BYJU's Alpha filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware, including to investigate and resolve claims related to the $533 million in missing loan proceeds.
• In March 2024, the Court found Camshaft Capital Fund, LP and its founder William Morton to be in contempt and issued a bench warrant for the civil confinement of William Morton following his refusal to produce information required by the Court to be produced in discovery, including discovery into the transfer of the $533 million in missing loan proceeds.
• In March 2024, the Court also confirmed that the transfer of $533 million away from BYJU's Alpha likely constitutes a fraudulent conveyance and prohibited further transferring or using any of the $533 million and found Byju Raveendran and Divya Gokulnath to be working in concert with Riju Ravindran.
• In May 2024, the Court found Riju Ravindran to be in contempt following his repeated refusal to disclose or ascertain the location of the $533 million in loan proceeds.