Embattled Indian edtech startup BYJU’s has reached a tentative agreement to rework its loan pact with lenders who collectively own more than 85% of the $1.2-billion Term B loan, the Economic Times reported on Monday.
BYJU’s and the group of lenders have agreed to work collaboratively toward a signed and completed term loan amendment prior to August 3, 2023, the report added.
If the loan terms are successfully reworked, then the creditors would drop their demand for accelerated repayment. Further, all ongoing litigation could come to an end while avoiding enforcement actions initiated by the lenders.
BYJU’s did not respond to a request for comment by DealStreetAsia.
This comes as BYJU’s and some of its lenders are known to have restarted negotiations to restructure its $1.2 billion term loan.
Last month, BYJU’s filed a complaint in the New York Supreme Court to challenge the accelerated $1.2-billion Term B Loan (TLB) and disqualify Redwood, alleging that it purchased a significant portion of the loan in violation of TLB terms, primarily engaging in distressed debt trading. The company had missed a $40 million interest payment to its TLB creditors after which it filed a lawsuit in New York on the same day.
Later, the lenders of BYJU’S $1.2-billion Term B loan said that the company has consistently failed to provide audited financial statements for the fiscal year ending March 31, 2022, as well as complete unaudited financial statements for multiple quarters, in a court complaint dated May 23 reviewed by DealStreetAsia.
The beleaguered edtech firm has been caught in the crosshairs of multiple issues including board members resigning and Deloitte’s exit as the statutory auditor.
Earlier on Monday, MoneyControl reported that the firm has vacated its largest office space in Bengaluru, as it seeks to cut costs and shore up liquidity amid a delay in funding.
The company confirmed the development and said, “Expansion and reduction in office space are based on changes in working policies and business priorities which are very regular and are aimed at boosting operational efficiencies.”