BENGALURU: Troubled edtech firm Byju’s has missed an August 3 timeline set by its creditors to amend a $1.2 billion term loan. On July 24, the steering committee of ad-hoc term loan lenders, who collectively own over 85% of the edtech firm’s $1.2 billion term loan, said the successful execution of the amendment would immediately solve for the loan’s acceleration and end all open litigation while avoiding further enforcement actions.
Sources said discussions are on and it is progressing well in the right direction and expected to close at the earliest. The next meeting with the lenders is scheduled for early next week. Byju’s spokesperson said, “No deadline has been missed as August 3 was merely a hopeful date that was likely to be scheduled for a sign-off.”
Earlier in June, it had filed a complaint in the New York Supreme Court to challenge the acceleration of the $1.2 billion TLB (the firm secured this loan in November 2021) and sought to disqualify Redwood, an investment management firm. It had skipped paying $40 million interest. Meanwhile, Davidson Kempner Capital Management, a US-based investment fund, is said to have initiated the reconstitution of the board of Byju’s subsidiary Aakash Educational Services in order to improve governance. “AESL board is being strengthened with three Think and Learn (Byju’s) nominees and two independent directors,” a spokesperson from Byju’s said.
CEO Byju Raveendran might be the only representative of the parent on Aakash board. This comes a few days after Byju’s parent Think and Learn has sent a legal notice to Aakash founders due to their alleged resistance to complete a share swap. The company had acquired Aakash for about $950 million in a cash and stock deal in 2021. Recently, two independent directors of Aakash Educational Services have resigned from the board.
In June, Byju’s announced that it will launch the IPO of Aakash mid-next year. The upcoming IPO will provide a significant capital infusion to bolster Aakash’s infrastructure, broaden its reach, and extend high-quality test-prep education to a larger number of students across the nation, Byju’s had said.