Home / Business and Economy / Udaan Faces Insolvency: Creditors Sue Over $170M Default
Udaan Faces Insolvency: Creditors Sue Over $170M Default
2 Jul
Summary
- Creditors initiated insolvency proceedings in Singapore over a $170 million default.
- Udaan's offshore holding company, Trustroot, defaulted on convertible notes.
- Insolvency proceedings involve a $170 million default on convertible notes.
Global creditors, including banks and hedge funds, have initiated insolvency proceedings against Udaan's offshore holding company, Trustroot Internet Pvt Ltd, in the Singapore High Court. This legal action follows a default on $170 million in compulsorily convertible notes that matured on June 30. Alvarez and Marshal have been appointed as the official liquidator for the bankruptcy proceedings.
The default underscores emerging challenges within private credit markets. Udaan, a B2B e-commerce company founded in 2016, has reportedly accumulated cumulative losses of approximately ₹13,000 crore since FY25. In the weeks prior to this development, several lenders, including JP Morgan, HSBC, DBS, and Axis Bank, withdrew working capital lines.
Creditors sought a debt-restructuring plan due to mounting losses and a significant drop in the company's equity valuation. However, negotiations failed to reach a consensus on upfront payments. Consequently, creditors initiated winding-up proceedings by filing a petition. The original agreement stipulated that the convertible instruments would convert into shares if Udaan had listed by now.
Udaan's India entities remain insulated from these legal challenges, according to the company. A previous plan involved consolidating Udaan's units under Hive-loop Ecommerce and a reverse merger of Trustroot into the India-domiciled entity ahead of an IPO, which was projected to be nine to 18 months away.
