Edtech giant BYJU’S has put two of its subsidiaries, Epic and Great Learning, on sale and is looking to raise between $800 Mn and $1 Bn from it, according to sources.
The development comes hours after reports surfaced that the edtech giant has proposed a repayment plan to the lenders of its $1.2 Bn Term Loan B.
The sale of Epic and Great Learning was part of the proposal BYJU’S made to its Term Loan B lenders, the sources added.
BYJU’S is expecting to raise $400-$500 Mn from the sale of Epic, the US-based kids’ learning platform it acquired in a $500 Mn deal in May 2022. Similarly, it is eyeing $500 Mn-$600 Mn from the sale of higher education and upskilling firm Great Learning, according to ET. BYJU’S acquired Great Learning for $600 Mn nearly two years ago.
Out of the $1.2 Bn Term Loan B, BYJU’S has about $500 Mn left. The sale of Epic and Great Learning will allow the edtech giant to clear the loan and give it some room for negotiations with other lenders. To be sure, the edtech has offered to repay $300 Mn of the distressed debt within three months and the remaining amount in the next three months if its amendment proposal is accepted, Bloomberg reported earlier today citing sources.
The edtech giant is also said to be in talks with sovereign wealth funds for a new fundraise. According to multiple media reports, BYJU’S might raise as much as $1 Bn in equity funding, which would see cofounder and CEO Byju Raveendran dilute his stake significantly.
The proposal, if accepted by the TLB lenders, will come as a major relief to BYJU’S, which has been working on finding a solution for the $1.2 Bn headache for the past few months. Things started going downhill after both parties sued each other in the US, as the lenders demanded an acceleration of the loan’s payment, while the edtech giant accused Redwood, a lender, and its associates, of ‘predatory actions’.
However, the steering committee (SteerCo), a group of lenders which owns 85% of the TLB, had said in July it would commit to signing an agreement with BYJU’S to amend the loan’s terms in August.
The edtech giant has been at the centre of a storm over the past few months. From run-ins with Indian authorities to issues with lenders, employees, top management and customers alike, BYJU’S has been fighting a war on multiple fronts.
Most of its problems with the authorities and lenders have been due to a long delay in filing its financials for FY22, which are now running late by 18 months. According to media reports, lenders considered delays in filing its financials a technical default, while it was also cited by Deloitte as a reason to resign from its position as the edtech’s statutory auditor back in June.
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