BYJU’S violated the clauses of the contract signed with Teleperformance, which resulted in significant financial losses to the business process outsourcing (BPO) major, sources said
The edtech giant failed to give a three-month notice before terminating the contract of the vendor and failed to clear an outstanding invoice of approximately INR 3-4 Cr
The development adds to the troubles of the embattled company, which is now looking to raise $200 Mn via a rights issue at a 99% valuation cut
The decision of BYJU’S to terminate the contract of France-based Teleperformance without giving a prior notice and failure to clear pending dues of about INR 3-4 Cr led the vendor to file an insolvency plea against the embattled tech giant, according to sources.
It is pertinent to note that Teleperformance Business Services India Ltd filed the insolvency plea against BYJU’S in the National Company Law Tribunal (NCLT), Bengaluru in November last year. The case was registered on January 25, as per the tribunal’s website.
The troubled edtech giant violated the clauses of the contract signed with Teleperformance, which resulted in significant financial losses to the business process outsourcing (BPO) major, the sources told Inc42.
“BYJU’S was supposed to provide a three-month notice for any business ramp down. However, they unexpectedly initiated the ramp down without adhering to this agreement. This action not only violated the contractual terms but also had financial implications as BYJU’S failed to clear an outstanding invoice of approximately INR 3-4 Cr owed to Teleperformance,” a source said.
Teleperformace was working closely with BYJU’S India for various customer service functions and sales operations. It also helped the edtech major to onboard new students for courses, the sources added.
Queries sent to Teleperformance and BYJU’S on the development remained unanswered till the time of publishing this story. The story will be updated on receiving their responses.
The development adds to the growing number of insolvency cases being faced by BYJU’S. The Board of Control for Cricket in India (BCCI) has already dragged the edtech company to the NCLT over a payment dispute of INR 158 Cr.
Last week, BYJU’S overseas lenders for its $1.2 Bn Term Loan B also filed an insolvency case against the company with the Bengaluru bench of the NCLT.
Amid all these, the cash-starved company is looking to raise $200 Mn from its existing investors via a rights issue at a post-money valuation of $225 Mn, a whopping 99% decline from its last valuation of $22 Bn.
The Byju Raveendran-led startup has been fighting on multiple fronts over the last year or so. It has been plagued by various issues, including a severe cash crunch, layoffs, legal tussle with lenders, write-offs of subsidiary companies, and growing losses.
As per sources, Raveendran explored multiple ways to raise funds externally and also via a SPAC deal but failed to do so.
Earlier this month, the company filed its financial statements for FY22 after a long delay. Its consolidated net loss surged 81% to INR 8,245.2 Cr during the year under review from INR 4,564.3 Cr in FY21.
Operating revenue rose over 120% year-on-year to INR 5,014.6 Cr in FY22, mostly on the back of Aakash’s improved performance.
