The edtech giant has mentioned it as a lender to the tune of INR 440.77 Cr in its audited financial statements for FY21, which IIFL Finance has disputed
In a regulatory filing, IIFL stated that it did not lend any money to BYJU’S and the mention in the edtech’s financials is an error
The development comes as the edtech giant is struggling with lenders for two separate loans, including its Term Loan B lenders and Davidson Kempner
Financial services major IIFL Finance has claimed that it has never lent any money to edtech giant BYJU’s, despite the latter stating so in its financials for the fiscal year 2020-21 (FY21). IIFL issued a clarification calling the mention an error on BYJU’S part.
“It has come to our notice that Think & Learn Private Limited (“BYJU’S”) has erroneously stated IIFL Finance Limited as Lender in their Audited Standalone and Consolidated Financial Statements for the period ended March 31, 2021,” said IIFL Finance in a filing with the BSE.
According to IIFL Finance, the edtech giant has mentioned it as a lender to the tune of INR 440.77 Cr in its audited financial statements for FY21. For its part, BYJU’S has admitted that the inclusion of IIFL was ‘inadvertent’ and has sent a letter dated August 23, 2023, to the lending company.
“We further confirm that IIFL Finance Limited has not lent any money to BYJU’S and this was an error in their audited financial statements,” the company added.
The edtech giant is struggling with two different sets of lenders – the Term Loan B (TLB) lenders and Davidson Kempner – for settlements on a cumulative lending amount of $1.45 Bn.
In some relief to BYJU’S, the company’s TLB lenders have agreed to delay their ongoing legal battle in US courts until October 6. This postponement is likely to allow both parties time to negotiate an out-of-court settlement.
BYJU’S had filed a lawsuit in the New York Supreme Court to stop the TLB lenders from accelerating the closure of its $1.2 Bn loan. The lenders contended that BYJU’S had violated multiple covenants, including submitting financial statements for FY22, which have been delayed for several quarters. The lenders consequently demanded expedited loan repayment.
Over the past few months, both parties have been locked in negotiations regarding new repayment terms and a restructuring of the loan, including upfront payments of $200 Mn and 12-13% interest, with a restructured tenure of 3-5 years.
Besides this, the edtech giant is locked in battle with Davidson Kempner, another of its lenders. BYJU’s and DK are in negotiations to settle a dispute over the breach of a loan covenant by Aakash Educational Services Limited (AESL), the edtech giant’s offline test prep arm.
BYJU’S has offered to repay this loan along with the full interest, but the lender is seeking interest on the entire amount for one to two years. BYJU’S cofounder and CEO Byju Raveendran has instead proposed interest pertaining to one quarter.
Talks between the two companies are centred on the exact payout and a formal proposal is expected this week by the two parties.
On the sidelines, Manipal Group chairman Ranjan Pai is said to have finalised an $80 Mn investment in Aakash, which could be utilised to repay Davidson Kempner, with Pai receiving shares in Aakash in exchange.