Relief For BYJU’S: Lenders Agree To Complete Term Loan Amendment By August 3

SUMMARY

We are pleased to make progress with BYJU’S toward a completed loan amendment: Steering committee of BYJU’S Term Loan B

Successful execution of the amendment would immediately solve the loan’s acceleration and end all open litigation

The breakthrough is important for BYJU’S as it comes after months of extensive litigation, with several lenders pulling out of restructuring talks

In a major breakthrough for embattled edtech decacorn BYJU’S, it has managed to get the steering committee (SteerCo) of the ad hoc lenders of its Term Loan B lenders to agree to sign a term loan amendment by August 3.

The steering committee members together own 85% of the $1.2 Bn Term Loan B.

In a statement, the SteerCo said that successful execution of the amendment would immediately solve the loan’s acceleration and end all open litigation while avoiding further enforcement actions.

“We are pleased to make progress with BYJU’S toward a completed loan amendment. This announcement is consistent with our stated goal of working constructively with BYJU’S management to protect the value of the franchise. We look forward to completing the loan amendment over the next two weeks and are committed to doing our part to deliver on our agreed-upon timeline,” the statement added.

Inc42 has reached out to BYJU’S for a comment on the issue. The story will be updated upon receiving a response from the company.

The statement confirms the media reports from Sunday and Monday indicating that BYJU’S had reached a tentative agreement with its lenders, having successfully brought the SteerCo to the negotiations table after extensive litigation from both sides over the past few months.

In June, the company stopped payments to its TLB lenders and dragged one of its TLB lenders, Redwood, to the New York Supreme Court. It also sought to disqualify Redwood as a lender.

BYJU’S argued that even though Redwood primarily trades in distressed debt, it purchased a significant portion of the TLB and has been spearheading a series of ‘predatory tactics’ against the $22 Bn-valued edtech giant.

It was also reported that the creditors pulled out of the negotiations with the startup to restructure its loan worth $1.2 Bn.

The agreement to restructure its term loan represents a big win for BYJU’S after a series of losses for the edtech decacorn. Earlier today, it was widely reported that BYJU’S vacated a couple of locations in Bengaluru in a bid to save costs.

Over the past 18 months, the Byju Raveendran-led edtech giant has witnessed dizzying highs and lows. It hit a sky-high valuation of $22 Bn in March 2022 after raising $800 Mn in funding while also reporting losses of over INR 4,500 Cr for the year ended March 31, 2021, in September 2022.

This year, the edtech giant has witnessed a drawn-out legal tussle with its creditors, the resignations of key board members and statutory auditor and mass layoffs, not to mention the heat from government agencies, including the Enforcement Directorate (ED), the Ministry of Corporate Affairs and the Employees’ Provident Fund Organisation (EPFO).