lenders have reportedly abandoned discussions with the edtech company regarding a $1.2 billion loan restructuring.
Bloomberg reported that the talks were terminated after the creditors took legal action, alleging that BYJU’S concealed $500 million in raised funds. Consequently, the restraint that had been imposed as part of the negotiations has been lifted, allowing the lenders to sell the edtech firm’s term loan B securities, it added.
In April, The Economic Times reported that BYJU’S lenders had asked for up to $200 million in prepayment and a higher rate of interest from the edtech firm as a precondition to restructure its $1.2-billion term loan B (TLB). This was the biggest TLB being placed by an Indian startup at the time of the raise, but the loan was unrated.
Despite the discontinuation of talks by the lenders’ steering committee, BYJU’S intends to independently engage with all lenders to renegotiate the terms, the Bloomberg report stated.
The report added that BYJU’S must make an interest payment on the loan by June 5, with the company’s lawyer stating in a US court last month that a significant capital infusion is imminent, allowing them to repay the loan.
This development comes a few weeks after BYJU’S raised $250 million in fresh funding at a flat valuation of $22 billion through structured instruments. The Bengaluru-based company is expected to close an additional $700 million from a sovereign fund at the same valuation.
Meanwhile, BlackRock recently reduced the valuation of its stake in BYJU’S by 62% as of March 31, 2023. The decrease in the value of BlackRock’s stake in the edtech company has resulted in BYJU’S being valued at about $8.4 billion.
It is worth noting that an AMC’s evaluations of fair values are typically influenced by its internal assessment of the broader macro and microenvironment.
BYJU’S, which is yet to file its financials for FY22, reported a loss of Rs 4,564.38 crore in FY21—bigger than its FY20 loss, which stood at Rs 305.5 crore.
