Byju’s, the esteemed edtech giant and India’s most valuable startup, has taken a surprising and optimistic step by offering to expedite the repayment of its substantial $1.2 billion term loan B (TLB) to its lenders in less than six months, potentially bringing some relief to the financial landscape.
This bold move involves a proposal to repay $300 million of the $1.2 billion loan within the next three months, conditional upon the lenders’ acceptance of Byju’s proposed amendment. According to a source familiar with the situation, the lenders are currently reviewing the proposed amendment and have requested further details regarding the repayment terms.
“The company has devised an assertive plan for loan repayment and expresses confidence in its ability to fulfill the obligation,” stated the anonymous source.
In November 2021, Byju’s successfully secured $1.2 billion in debt through a term loan facility (TLB) from a consortium of international investors. TLBs are typically utilized to either refinance existing debts or finance overseas acquisitions, aiming to enhance a company’s portfolio and offerings.
Earlier this year, in June, Byju’s initiated legal action against the lenders in the New York Supreme Court, challenging the acceleration of the TLB and withholding a $40 million interest payment due post-acceleration. Subsequently, numerous discussions took place between the parties in an attempt to negotiate an amendment.
In July, the lenders announced their intent to reevaluate the terms of the $1.2 billion loan with Byju’s by August 3. However, the negotiations between the two parties did not yield a conclusive agreement.
Byju’s, a prominent player in the global edtech sector and last valued at approximately $22 billion, has been actively seeking additional capital throughout the year. Nevertheless, the company has encountered persistent challenges in securing funding both domestically and internationally.
In May, Byju’s successfully raised $250 million through structured financial instruments from Davidson Kempner. Unfortunately, the negotiations with lenders did not progress smoothly, leading to the US-based AMC withholding close to $150 million of the funds.
Furthermore, Byju’s faced a technical default on the Davidson Kempner loan, compelling Byju Raveendran, the company’s founder, to pursue additional funds to avert relinquishing control of Aakash Educational Services, one of his most valuable assets. Byju’s had pledged Aakash’s shares as collateral for the Davidson Kempner loan.
Adding to its financial strategies, Byju’s is actively exploring fundraising opportunities with one of its earliest backers, Ranjan Pai, for Aakash Educational Services. There is speculation that Pai may acquire a portion of Raveendran’s stake in Aakash, a move reported by Moneycontrol last month. Currently, Raveendran holds approximately 30 percent of Aakash’s stake.