BYJU’S Term Loan B Saga: Now, Overseas Lenders File Insolvency Petition In India

Troubled edtech firm BYJU’S foreign lenders, who jointly provided over 85% of the company’s $1.2 Bn Term Loan B (TLB), have filed an insolvency petition against the startup.

Moneycontrol reported that the bankruptcy petition was filed with the Bengaluru bench of the National Company Law Tribunal (NCLT) against BYJU’S earlier this week.

However, BYJU’S, in a statement, said that any proceedings by lenders before the NCLT are premature and baseless.

“As we have stated before, the validity of lenders’ actions, including acceleration of the term loan, is pending and under challenge in several proceedings, including before the New York Supreme Court,” the edtech company said.

“Surprisingly, the acceleration and consequent actions by the lenders appear to be based, in part, on the failure of Whitehat Education Technology Pvt. Ltd, a wholly owned subsidiary of Think & Learn, to guarantee the term loan,” the statement added.

BYJU’S said that any such guarantee would contravene extant RBI regulations. In fact, proceedings are on foot before the Delaware appellate courts on this very issue.

Earlier it was reported that BYJU’S offered to pay back the entire $1.2 Bn TLB to its lenders in less than six months. The edtech major made an offer to repay $300 Mn of the distressed debt within three months and the remaining amount in the next three months if its amendment proposal was accepted.

BYJU’S and its lenders of the TLB have been involved in a legal tussle for almost a year now. Several negotiations to alter the loan repayment terms have failed over the last year.

Amid the crisis, BYJU’S is planning to raise $100 Mn to $200 Mn via a rights issue at a much lower valuation of $2 Bn. This is a nearly 90% valuation cut compared to its peak $22 Bn valuation at which the edtech decacorn raised funds in 2022.

However, BYJU’S India’s chief financial officer (CFO) Nitin Golani told PTI that the edtech startup is looking to raise capital in the range of $7 Bn-$8 Bn during its upcoming rights issue in February.

Besides the TLB issue, BYJU’S has been plagued by multiple problems, including the exit of board members, mounting losses, and layoffs.

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 in FY22 from INR 4,564.3 Cr in FY21

Operating revenue rose over 120% year-on-year to INR 5,014.6 Cr during the year under review, mostly on the back of improvement in the financial performance of Aakash.

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