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Edtech firm BYJU’S has reportedly reached a tentative agreement to renegotiate its loan pact with lenders who collectively own more than 85% of its $1.2-billion term loan B (TLB). An announcement regarding this is expected on July 24.

The Economic Times has reported that BYJU’S and its lenders have agreed to collaboratively finalise a term loan amendment before August 3, 2023. The report said that successfully reworking loan terms may lead to the creditors dropping their demand for accelerated repayment, potentially resolving ongoing litigation and avoiding enforcement actions from the lenders.

It noted that a formal agreement with lenders will be crucial for BYJU’S, as resolving differences over the $1.2 billion TLB has become a significant challenge for the firm.

YourStory could not independently verify the report.

Besides the creditor conflict, BYJU’S is grappling with other issues such as the resignation of key board members and delay in filing financial statements.

BYJU’S and the lenders have been involved in litigation against each other in the US courts. Last month, a consortium of ad hoc lenders termed BYJU’S lawsuit against them as ‘meritless’ after the company challenged the acceleration of the loan in the New York Supreme Court. This action came a day after BYJU’S reportedly missed a quarterly interest payment of about $40 million on the loan.

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BYJU’S Alpha, a wholly-owned subsidiary of the edtech unicorn, raised the loan in November 2021. It was the biggest TLB placed by an Indian startup at the time of the raise, but the loan was unrated.

Late last month, BYJU’S Co-founder and CEO Byju Raveendran said that the firm is working to resolve the TLB dispute through productive discussions, and it is confident of attaining a favourable resolution within the coming weeks without court intervention.

According to the report, the lenders and the Bengaluru-based edtech firm are aiming to finalise the loan agreement amendments within the next two weeks through close collaboration.

Meanwhile, the firm has implemented job cuts as part of its ongoing cost-cutting measures that have been in effect since last year. A few weeks ago, it initiated another round of job cuts that would impact more than 1,000 people.

During an emergency town hall meeting on Saturday, BYJU’S committed itself to halting additional layoffs of BYJU’S Tuition Centre employees, as reported by Moneycontrol. The company also agreed to provide variable pay and other incentives to more than 5,000 employees of BYJU’S Tuition Centre.

According to another Moneycontrol report, BYJU’S has vacated its largest office space in Kalyani Tech Park, consisting of two buildings—Magnolia and Ebony, which were leased in June last year—as it aims to reduce expenses.

Starting July 23, all employees have been asked to work from either Prestige Tech Park or the main office on Bannerghatta Main Road in Bengaluru or opt for remote work from their homes, the report added. Moreover, BYJU’S has surrendered two of the nine floors previously occupied in Prestige Tech Park.

Last month, the company said that the FY22 audit is targeted for the end of September, and the FY23 audit is expected to conclude by the end of December. In FY21, the edtech giant reported a loss of Rs 4,564.38 crore, which was significantly larger than its FY20 loss of Rs 305.5 crore.