New Delhi, June 11 -- Beleaguered edtech Byju's has been forced to sell its two US-based companies-reading platform Epic and kids coding platform-in a fire sale, at a fraction of the cost it acquired them for in 2021, as it undergoes insolvency proceedings.

TAL Education Group, a Chinese holding Company that is headquartered in Beijing, will buy Epic, paying $95.1 million to Byju's, as it looks for avenues to expand its influence to the American market, court documents show. Byju's had acquired the company about four years ago for about $500 million when it was on an aggressive expansion spree in a mix of cash and stock.

Further, the court also ordered the sale of Tynker, another of Byju's US-focused subsidiaries, to be sold to CodeHS, a Chicago-based provider of computer science teaching platform to schools, for about $2.2 million. The Indian edtech company had bought the startup in June 2021 for $200 million.

News publication EdWeek Market Brief first reported these developments.

The proceeds from the distressed sales, which come following bankruptcy proceedings for the company in the United States, from both of these companies will go towards Byju's creditors. It will be used to pay off secured and unsecured loans to Byju's Delaware-based special purpose finance vehicle Byju's Alpha's creditors, who had extended over $1.2 billion in loans to the firm in 2021, backed by guarantees from Epic, Tynker, and other US subsidiaries.

Once valued at $22 billion, Byju's is facing insolvency proceedings.

The controversy began when Byju's Alpha defaulted on its credit agreement in March 2022, just months after receiving the term loan. The funds were later transferred to various entities, including a sham hedge fund with no investment record, and a listed address that matched a pancake restaurant.

A Delaware Bankruptcy Court ruling in February this year had found Raveendran's brother Riju Raveendran, hedge fund Camshaft Capital, and Byju's parent entity Think & Learn responsible for defrauding Byju's Alpha and its lenders.

Byju's Alpha had transferred $533 million (Rs 4,600 crore) of the loan proceeds to Camshaft Capital Fund, a hedge fund, thereby defrauding its lenders. Following the ruling, in April, Byju's Alpha, had filed a lawsuit against the company's founder Byju Raveendran, co-founder and wife Divya Gokulnath, and senior executive Anita Kishore for misappropriating these funds.

Published by HT Digital Content Services with permission from VC Circle.