Amidst its debt crisis, edtech company Byju’s appears to be taking significant strides towards resolution. The steering committee of ad hoc term loan lenders is ready to collaborate with the company to sign and complete a term loan amendment.
The steering committee of ad hoc term loan lenders, who represent more than 85% of Byju’s $1.2 billion term loan, on Monday, announced that it will work with the edtech giant to sign and complete term loan amendment by August 3.
“We are pleased to make progress with BYJU’S toward a completed loan amendment. This announcement is consistent with our stated goal of working constructively with BYJU’S management to protect the value of the franchise. We look forward to completing the loan amendment over the next two weeks and are committed to doing our part to deliver on our agreed upon timeline,” the steering committee said in a statement.
If the amendment goes through successfully, it will promptly resolve the loan acceleration, end all ongoing litigation, and prevent additional enforcement actions.
Byju’s took a $1.2 billion term loan B for a tenure of five years with a yield to maturity (YTM) of 6.78% in November 2021. A debt crisis started when the edtech firm skipped its $40 million loan repayment on June 5 this year and later sued its lenders, alleging predatory tactics.
A Delaware court in the US gave a decision in favour of Byju’s as the court denied a request by term loan B lenders to investigate the matter of $500 million transfer from its US-based subsidiary Byju’s Alpha to other entities.
To consolidate its position in the market, Byju’s recently appointed Arjun Mohan, the former chief executive officer of upGrad, as the CEO of its international business. The firm has also roped in Rajnish Kumar and T V Mohandas Pai to join its newly constituted Advisory Council. Both will advise and mentor the company’s board and its CEO Byju Raveendran.
