Byju’s Makes a Surprise $1.2 Billion Repayment Proposal to Lenders

(Bloomberg) — Indian edtech titan Byju’s has made a surprise repayment offer to lenders, in which the company has offered to repay its entire $1.2 billion term loan in less than six months, according to people familiar with the situation.

The company is offering to repay $300 million of the distressed debt within three months if the change proposal is accepted and the remaining amount in the following three months, said the people, who asked not to be identified because the discussions are private. Byju’s is in talks with private equity funds and strategic investors to sell some of its overseas units to fund repayment, they said.

Byju’s and its lenders have been embroiled in a dispute for almost a year, during which rounds of negotiations to revise the loan agreement have failed. The company decided to forego an interest payment on its term loan, one of the largest for a startup in the world. This exacerbated a dispute that is at the root of the company’s mounting problems.

Successful unit sales, including US-based digital reading platform Epic! Creations Inc. and Great Learning Education Pte. the company’s eponymous founder Byju Raveendran will be left with enough cash to expand the business after all debts are paid off, the people said.

The Bangalore-based company acquired Epic for about $500 million and Great Learning, a professional training and higher education platform, for about $600 million in 2021 in cash and stock deals. Byju’s is seeking to raise more than $1 billion from the divestitures, the people said.

The company has sought a quick resolution and implementation of an amendment, they said. It is unclear whether the sides will reach an agreement, a crucial step in a broader campaign to turn around the startup, once considered India’s most valuable at $22 billion.

A representative for the lenders declined to comment on the company’s repayment offer. A spokesperson for Byju’s did not immediately respond to a request for comment.

The company, whose parent company is formally known as Think & Learn Pvt, took the five-year loan in 2021 to enhance growth outside India. The loan is quoted at 49.8 cents on the dollar, data compiled by Bloomberg show. A level below 70 is generally considered distressed.

Byju’s is also working to complete the audited accounts for the financial year ending March 2022 by September 30 and for the subsequent year by December. It will look to raise fresh equity to boost its operations after filing results, they said.

–With help from Vrishti Beniwal.

(Updates with details throughout.)

©2023 Bloomberg LP

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