BYJU’S seeks more time from creditors for $1.2 bn loan, claims report

Edtech giant BYJU’S is seeking more time from its creditors to negotiate an agreement pertaining to its $1.2 billion that is in breach of covenants, according to a report by news agency Bloomberg.
 
Quoting sources familiar with the matter, the report revealed that the creditors have until Tuesday to sign a forbearance agreement, which will give the company time till February 10 to negotiate broader terms on the term loan.

Moreover, the sources highlighted that BYJU’S hadn’t met the deadline to disclose financial results for the year ended March 31, 2022. 

BYJU’S is scrambling to appease creditors and investors already concerned about mounting losses, the sources said, adding that the Softbank-backed company has offered to raise fresh equity capital and provide creditors a so-called quality of earnings report and cash verification statements by external auditors. 

Reworking the agreement requires approval from a simple majority of lenders, the sources stated.

Last month Bloomberg reported that the company is seeking easier terms against its $1.2 billion loan as it struggles to cope with steep losses and cost reduction targets. The edtech major had even appointed an adviser to discuss tweaks in covenants of the term loan B with creditors. 

People familiar with the matter also told the news agency that discussions on more lenient terms, including lower coupon and more time to repay, are continuing and no final decision has been reached.

There were also reports of Byju Raveendran, the co-founder and CEO of BYJU'S, was in talks to raise his stake to 40 per cent in Think and Learn Pvt Ltd., the parent company of BYJU’S. Raveendran is seeking funds to finance the stake repurchases — which could amount to as much as 15 per cent of the firm — by using his shares as collateral. BYJU’S was valued at $22 billion in its last fundraising round. However, the buyback may happen at a lower valuation, the sources had told Bloomberg.

For the fiscal year which ended March 31, 2021, the Raveendran-led company booked a loss of Rs 4,588 crore and revenue of Rs 2,428 crore.

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