Edtech giant BYJU’S is engaging in negotiations with some of its lenders to restructure its $1.2 billion term loan B (TLB) after breaching certain terms of the debt agreement, according to sources cited by ET. The talks aim to prevent further escalation of the ongoing legal dispute and achieve a prompt resolution through the execution of an amendment.
The lenders have submitted a comprehensive amendment proposal to BYJU’S, outlining debt repayment, coupon enhancements, and improved investor protections. In response, BYJU’S has assured the lenders that it will review the proposal and provide a response early the following week.
This development follows recent reports that the lenders agreed to extend their cooperation agreement with BYJU’S for a minimum of three months. The consortium of lenders had previously been required to negotiate with BYJU’S as a united front, with the agreement set to expire in July.
The negotiations between BYJU’S and its lenders have attracted significant attention in recent weeks due to multiple attempts to restructure the TLB. Earlier this year, BYJU’S chose to skip a $40 million payment towards the TLB and subsequently sued key lender Redwood and its associates. Conversely, the lenders filed a lawsuit against BYJU’S US-based subsidiary, BYJU’S Alpha, in a Delaware court, seeking an investigation into the transfer of $500 million out of the subsidiary.
In June, the court ruled in favor of BYJU’S, providing substantial relief to the edtech giant. Despite the ongoing challenges, BYJU’S, valued at $22 billion during its previous funding round, is reportedly seeking to raise $1 billion in fresh equity from new shareholders to alleviate some investor pressure.
Meanwhile, BYJU’S CEO, Byju Raveendran, has encouraged employees to focus on the company’s mission amidst the noise surrounding the organization. Raveendran emphasized that the rise of the edtech sector is not merely a pandemic phenomenon but a permanent fixture in education.
Additionally, BYJU’S is reportedly in discussions with investors regarding the potential sale of a portion of its stake in its offline coaching subsidiary, Aakash Education Services.
