BYJU’S Brings Lenders To Table To Restructure $1.2 Bn TLB

Edtech giant BYJU’S has reportedly brought some of its lenders to the negotiation table to restructure its $1.2 Bn term loan B (TLB), having breached some terms of the debt agreement.

According to an ET report citing people familiar with the matter, the new talks come as both parties look to avoid escalating the ongoing legal tussle. The parties are seeking a swift resolution and execution of an amendment, the people were cited as saying.

The lenders have also tabled a detailed amendment proposal to BYJU’S, which includes a debt paydown, coupon boost and better investor protections. In response, the edtech has told the group of lenders that it will review the proposal and deliver its response early next week.

The move from the lenders comes days after they reportedly agreed to extend a cooperation agreement with the edtech by a minimum of three months. Earlier, it was reported that an agreement signed by the lenders’ consortium, requiring them to act in concert while negotiating with BYJU’S, was set to expire in July.

The development comes as the edtech and its lenders have been embroiled in a legal tussle around the TLB following multiple attempts to restructure it, which has drawn considerable attention over the past few weeks as issues escalated.

BYJU’S chose to skip a $40 Mn payment towards the TLB, suing a key lender, Redwood, and its associates in the process in June. Incidentally, the edtech’s lenders had also sued its US-based subsidiary, BYJU’S Alpha in a Delaware court seeking a probe in the edtech transferring $500 Mn out of the subsidiary.

However, the court ruled in favour of the edtech giant in June, in a major relief to it.

The edtech giant, valued at a sky-high $22 Bn during its last funding round, is now said to be looking to raise a fresh equity round worth $1 Bn from new shareholders, looking to stave off some pressure from the investors as BYJU’S struggles to keep pace.

Amid all the goings-on at the edtech giant, CEO Byju Raveendran asked the employees to ‘rise above the noise’. Raveendran also said the employees that the rise of the edtech sector is not a ‘pandemic phenomenon’ but a permanent fixture in education. 

BYJU’S is also reportedly in talks with investors to sell a portion of its stake in its offline coaching subsidiary Aakash Education Services.