BENGALURU: Edtech firm Byju’s has elected not to make any further payments on a $1.2 billion Term Loan B (TLB), including any interest until the dispute with the lenders is decided by the court. According to reports, the interest stood at about $40 million and was due on Monday.
Byju’s on Tuesday said it has filed a complaint with the New York Supreme Court to challenge the acceleration of the $1.2 billion TLB and sought to disqualify Redwood, an investment management firm. It alleged that a series of predatory tactics were conducted by the lenders, led by Redwood. Byju’s had raised the term loan in November 2021. In March this year, the TLB lenders “unlawfully” accelerated the TLB on account of certain alleged non-monetary and technical defaults, Byju’s claimed.
“On the back of this unconscionable acceleration of the TLB, the TLB lenders undertook unwarranted enforcement measures including seizing control of Byju’s Alpha and appointing its own management. Not resting content with this, the TLB lenders (acting through their agent, GLAS Trust Company) commenced litigation in Delaware in an attempt to lend credence to these actions,” the country’s most valuable start-up said.
Last month, Byju’s refuted allegations of lenders that Byju’s Alpha, its US entity, had hidden $500 million. The company categorically denied the allegations and said this is entirely incorrect. The lawsuit was filed by Glas Trust Company against Byju’s Alpha, its director Riju Ravindran and Tangible Play. Both companies are units of Think and Learn Private, founded by Byju Raveendran.
Byju’s said on Tuesday “Redwood – a lender known to primarily trade in distressed debt – consistently increased its exposure by acquiring a sizable stake in the TLB with the intent of making windfall gains. In the wake of all these actions, Byju’s was left with no option but to commence proceedings in New York – the contractually agreed forum – challenging the acceleration,” It said.
Along with this, Byju’s has also issued a notice to Redwood entities disqualifying them. The company also said it remains financially robust with significant cash reserves, and it is open to discussions with the TLB lenders.
BYJU’S FILES COMPLAINT WITH NEW YORK COURT
Byju’s on Tuesday said it has filed a complaint with New York Supreme Court to challenge the acceleration of $1.2 bn TLB and sought to disqualify Redwood, an investment management firm. It alleged a series of predatory tactics were conducted by the lenders, led by Redwood