Byju's Skips $40 Million Loan Payment In Dispute With Lenders - NDTV

The company led by Byju Raveendran had previously missed deadlines to file financial accounts.

Education startup Byju's has elected not to make further payments on a $1.2 billion loan after a dispute with lenders, escalating a conflict that could jeopardize the future of one of India's highest-flying startups.

Byju's did not pay $40 million in interest that was due on Monday, according to people with knowledge of the matter. The company said in a statement June 6 that it has filed a complaint concerning the loan to the New York Supreme Court.

"Given that legal proceedings are now on foot in both Delaware and New York, it is clear that the entire TLB is disputed," the company said, referring to the $1.2 billion term loan B. "As such, BYJU'S cannot be expected to and has elected not to make any further payment to the TLB lenders, including any interest, until the dispute is decided by the court."

Byju's had been trying to strike a deal with creditors to restructure the loan after the pandemic-era online tutoring boom tapered off and crimped its finances. But creditors demanding an accelerated repayment scrapped the long-running negotiations.

The payment hadn't been made as of 6pm in New York on June 5, according to the people, who asked not to be identified because the matter is private. Some lenders are exploring options on how to address a potential payment default, the people said.

The loan slumped to a low of 64.375 cents on the dollar on Monday, down from 78 cents on June 2, according to data compiled by Bloomberg.

The company led by former teacher Byju Raveendran had previously missed deadlines to file financial accounts, and its offices were searched by India's agency that investigates violations of the nation's foreign-exchange policies.

Raveendran, the son of educators, founded his eponymous startup in 2015. The firm, whose parent company is formally known as Think & Learn Pvt, grew into the most valuable of the country's startups over the past decade through a surge in demand for online education and a series of acquisitions.

It drew investments from from Tiger Global Management and Mark Zuckerberg's Chan Zuckerberg Initiative, along with Silver Lake Management and Naspers Ltd. Byju's had reached a valuation of $22 billion and had considered merging with a special-purpose acquisition company, or SPAC, to go public last year.

Byju's disputed the idea that its decision not to make interest payments signaled financial difficulties.

"Byju's remains financially robust with significant cash reserves," it said in its statement. "It remains open to discussions with the TLB lenders."

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Adblock test (Why?)

Byju's Skips $40 Million Loan Payment In Dispute With Lenders - NDTV
Read More