Consortium of Byju’s lenders extends pact to deal with edtech jointly: report

An earlier pact signed by the lenders’ consortium, which requires them to act in concert in negotiations with the edtech, is set to expire in July, Bloomberg reported, citing people in the know.

Per the report, the proposed agreement, reached by a steering committee, will be sent to the broader group of Byju’s lenders for approval.

India’s most valuable startup has been holding meetings with the creditors to restructure a $1-billion term loan, amid financial difficulties.

Back story
ET had earlier reported that owing to the delay in Byju’s releasing audited financial results for FY21 and FY22, the lenders had sought accelerated payment for the $1.2-billion term loan B raised in November 2021.

Discover the stories of your interest

Following this, Byju’s sued Redwood, an American investment management firm, and its related entities in the New York Supreme Court for accelerating repayment. Byju’s termed the lenders’ demands as “high-handed” and “elected” to not make any further payments to the TLB lenders till the matter had been decided by the court.

The term loan B — one of the largest ever raised by an Indian startup — has become a major issue for the General Atlantic-backed firm. Founder Byju Raveendran had also offered a higher interest rate on the loan as part of renegotiating the debt-financing arrangement.

Auditor, directors depart
Meanwhile, Byju’s was hit by a double whammy last week after board members representing Peak XV Partners (earlier Sequoia Capital India), Prosus and the Chan Zuckerberg Initiative stepped down.

News of their departures came the same day auditor Deloitte disclosed it was resigning because Byju’s had delayed releasing financial statements for 2021-22 and not provided documents even after the auditor wrote several letters to the board.

Subsequently, Byju’s announced the appointment of BDO (MSKA & Associates) as its statutory auditors from FY22 for the next five years.

September date
In a bid to pacify investors, Byjus said it will file the much-delayed audited financial results for fiscal year 2022 by this September, while the results for the year ended March 2023 will be submitted by December.

Adding to the woes, ET reported on Wednesday that the edtech firm is yet to receive the entire Rs 2,000 crore sanctioned by Davidson Kempner Capital last month as the edtech company had failed to meet the loan terms put forth by the US asset management firm.

The company is currently in advanced talks with prospective new shareholders for a $1 billion fundraising round, per a Bloomberg report.