Byju’s creditors withdraw from $1.2 billion loan restructuring talks
India’s most valued edtech firm, Byju’s, has suffered a major setback as its creditors have pulled out of ongoing discussions to restructure a $1.2 billion loan. According to a report by Bloomberg, the talks were halted after the creditors accused the company of concealing $50 million in funding, which led them to take legal action against Byju’s. The creditors can now sell the term loan B securities of Byju’s, as the restrictions on selling these securities have been lifted due to the failed discussions.
This move poses a new challenge for Byju’s, which has been trying to convince creditors to agree to loan restructuring by offering early payments and higher coupon rates. However, the company is now expected to approach each creditor separately to restart negotiations on loan terms.
According to sources, the creditors’ steering committee has stopped discussing the restructuring. However, Byju’s will try to persuade each creditor individually to agree to new loan terms.
The company’s lawyers had previously told a US court that Byju’s would receive “a significant funding” soon to repay its loans and that they had not concealed any funds. They also denied allegations of hiding funds raised through loans.
Byju’s spokesperson said on Thursday that the transfer of funds borrowed was “in full compliance with the loan agreement and did not violate any terms or conditions”. The spokesperson added: “Even the lenders have not alleged that the transfer was not permitted by the contractual agreement.”
Earlier, Byju’s had offered to increase the coupon rate on its outstanding loans and also offered to make early payments on some of the debt due in 2026.
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