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Edtech Startup Byju's Seeks More Time From Creditors To Repay $1.2 Bn Debt

The edtech startup is scrambling to appease creditors and investors who are already concerned about the startup's mounting losses. The India-based company has offered to raise new equity capital and provide creditors with a so-called quality of earnings report as well as cash verification statements from external auditors

Photo Credit : Byju's/Twitter,

According to media reports, Byju's, the world's most valuable edtech startup, has asked creditors for more time to renegotiate a $1.2 billion loan agreement that is in breach of covenants. 

According to reports, creditors have until Tuesday to sign a forbearance agreement, giving the company until February 10 to negotiate broader terms on the term loan. Byju's had missed the deadline for disclosing financial results for the fiscal year ending March 31.

The edtech startup is scrambling to appease creditors and investors who are already concerned about the startup's mounting losses. The India-based company has offered to raise new equity capital and provide creditors with a so-called quality of earnings report as well as cash verification statements from external auditors. A simple majority of lenders must approve any changes to the agreement.

Some creditors are requesting faster repayment of the loan using cash reserves of about $850 million from Byju's US unit after the parent missed a September deadline to disclose earnings. Any accelerated repayment will be a setback for the company, which is already struggling with steep losses and meeting cost-cutting targets.

Reports further disclose that the loan was valued at 81.9 cents on the dollar on Monday. Lenders who purchased the debt from primary holders in September, when the loan dropped to a record 64.5 cents, were looking to profit from accelerated repayment.

According to JPMorgan Chase & Co., one of the deal's bookrunners, the loan, priced at 550 points over Libor in November 2021, is one of the largest unrated term loan B offerings ever from a new-age company worldwide.


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