Holders of Byju’s $1.2 billion term loan and their advisers are weighing options including negotiating with the company for an amendment, litigating, or attempting to seize collateral after the company missed an interest payment on the debt, according to people with knowledge of the matter.
The group mulled options on a call held late Wednesday, said the people, who asked not to be identified because the matter is private. The company earlier reached out to a broad group of lenders and scheduled a call to discuss a loan amendment proposal, Bloomberg previously reported.
The company and lenders’ advisers Houlihan Lokey Inc. and Kirkland & Ellis didn’t immediately respond to requests for comment outside of normal US business hours.
The Indian education technology company and its lenders are mired in a fight over the term loan after the firm breached the terms of its debt agreement. On Monday, it elected to skip an interest payment on the loan and filed a lawsuit in New York alleging a group of investors manufactured a fake debt crisis to extort money from the firm.
Advisers asked the lender group this week to extend a cooperation agreement set to expire next month by an additional six months, the people said. Such a pact binds the lenders to act together in negotiations.
Byju’s had been trying to strike a deal with creditors to restructure the loan after the pandemic-era online tutoring boom tapered off, crimping its finances. But negotiations fell apart when creditors demanded an accelerated repayment.
The company’s loan is now quoted at around 64.5 cents, according to data compiled by Bloomberg.
Edtech major Byju’s has reportedly sued its lender Redwood, an American investment company, and its related entities in the New York Supreme Court for accelerating the repayment of a $1.2 billion Term Loan B (TLB). According to a report in Economic Times, this marks a new twist in the long-drawn saga playing out between Byju and its lenders. This comes after Byju’s missed its quarterly interest payment of about $40 million for the TLB that was due on June 5.
(With inputs from agencies)
