BYJU’s may sell Epic, Great Learning to repay entire $1.2b loan in six months

BYJU’s has put its two subsidiaries—Great Learning and Epic—on sale to generate $800 million-$1 billion, as the ailing Indian edtech firm looks to repay its entire $1.2 billion term loan in less than six months, sources familiar with the matter told DealStreetAsia.

If the proposal is accepted by the lenders, the company will repay $300 million within three months, and the remaining amount in the subsequent three months, the sources added.

BYJU’s declined to comment when approached by DealStreetAsia.

The Economic Times first reported about the sale discussions of Great Learning and Epic. The report said that BYJU’s is expecting anywhere between $400-$600 million from the sale of Epic, a US-based kids’ learning company it acquired in May 2022 for $500 million in cash and stock.

It is also expecting around $350-450 million from the sale of Great Learning, a professional training company that BYJU’s acquired in 2021 for $600 million.

Moreover, last month, media reports said that Ranjan Pai, chairman of the Manipal Group, was in early discussions to invest $80-90 million in BYJU’s-owned Aakash.

Bloomberg had reported earlier on Monday about the edtech firm’s plans to retire the loan in six months.

The loan has been a subject of conflict with lenders for over a year. The edtech firm secured the $1.2 billion term loan B in November 2021, and in the last year, has been in a conflict with its lenders, leading to mutual lawsuits between the two parties.

In July, the company had 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 steering committee of ad hoc term loan lenders had said.

The tentative agreement came a month after 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 loan is being quoted at 49.8 cents on the dollar, Bloomberg reported. A level below 70 is generally considered distressed, the report added.

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