Udaan Settles Offshore Debt Claim and Avoids Insolvency

Udaan, the Bengaluru based business to business ecommerce platform, has reached an agreement with its offshore creditors to resolve a long running debt dispute. The settlement covers a claim of 178 million dollars and brings an end to insolvency proceedings that had been initiated against the company’s Singapore holding entity in the Singapore High Court.

The dispute arose after Trustroot Internet, the offshore vehicle, missed repayment on convertible notes that matured at the end of June. Creditors responded by starting formal insolvency action, raising the possibility of a deeper financial crisis for the company. Talks continued through early July, and by mid month the parties finalised terms that allowed the claim to be restructured and settled with support from major stakeholders including BlackRock.

The agreement forms part of a wider capital restructuring package estimated at around 160 million dollars. This includes fresh equity from existing investors such as Lightspeed and M and G, private credit participation, and the conversion of a portion of outstanding debt into equity. The combination is intended to strengthen the balance sheet, simplify the capital structure and improve the company’s overall financial position.

Udaan has been working to reduce operating losses and move closer to sustainable profitability while preparing for a potential public listing. The resolution of the offshore debt claim removes a significant legal and financial overhang that could have complicated those plans. Company representatives have emphasised that day to day operations remained unaffected during the negotiations and that the focus continues to be on serving its network of suppliers and buyers across India.

The development comes at a time when several large Indian startups are navigating tighter funding conditions and higher expectations around financial discipline. By securing creditor support and additional capital, Udaan has demonstrated an ability to address complex cross border debt issues through negotiation rather than prolonged legal confrontation.

Market observers note that the involvement of a global asset manager of BlackRock’s scale added credibility to the restructuring process and helped align the interests of different creditor groups. With the immediate insolvency threat removed, the company can now concentrate on operational improvements and the next stages of its growth strategy.

The July settlement marks a clear turning point for Udaan after months of uncertainty surrounding its offshore liabilities. It provides a more stable foundation from which the platform can continue building its position in India’s business to business ecommerce sector.