Byjus, lenders agree to complete term loan amendment by Aug 3
In a breather to the troubled edtech company, the steering committee of lenders has agreed to amend a USD 1.2 billion term loan with Byjus by August 3, 2023, the lenders announced on Monday.
Successful execution of the amendment would “immediately” solve the loans acceleration and end all open litigation while avoiding further enforcement actions, they in a statement.
An e-mail sent to Byjus did not elicit a response.
“We are pleased to make progress with BYJUS toward a completed loan amendment. This announcement is consistent with our stated goal of working constructively with BYJUS management to protect the value of the franchise,” the steering committee (SteerCo) of ad hoc term loan lenders said.
These lenders, collectively own more than 85 per cent of Byjus USD 1.2 billion term loan.
“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 statement said.
In recent months, the edtech major has been grappling with multiple issues, including concerns over its corporate governance practices.
“The steering committee of ad hoc term loan lenders, who collectively own more than 85 per cent of BYJUS USD 1.2 billion term loan, today announced that it and BYJUS have agreed to work collaboratively toward a signed and completed term loan amendment prior to August 3, 2023,” the statement said.
Notably, GLAS Trust Company on behalf of the TLB lenders had filed a suit against Byjus US subsidiary after the company missed paying its USD 40 million interest payment to the creditors.
Last month, a Delaware court rejected a request by edtech major BYJUS Term Loan B lenders to investigate into USD 500 million transfer from its US-based subsidiary BYJUS Alpha to other entities, sources had said.
However, it also rejected Byjus appeal in the New York Supreme Court to challenge the acceleration of the USD 1.2 billion term loan B and disqualify lender Redwood, halting payments due for the loan.
The edtech giant has initiated a slew of measures such as formation of an advisory council which appointed ex-SBI Managing Director Rajnish Kumar and one of their early investors, and IT industry stalwart and Infosys former CFO, TV Mohandas Pai.
Investors G V Ravishankar of Sequoia Capital (now Peak XV Partners), Vivian Wu of Chan Zuckerberg Initiative and Russell Dreisenstock of Prosus had resigned from Byjus board of directors, confirming the development in late June. Around the same time, Deloitte Haskins and Sells resigned as the edtech companys auditor. Also, the troubled startup has cut down on its office spaces in Bengaluru in a bid to cut costs and ramp up liquidity.
Byjus vacated one of the three offices in Bengaluru. Also, it has vacated three out of the six floors it occupied at its main corporate office.
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