CHENNAI: Byju’s Alpha has made an investment in Camshaft Capital Fund but our credit agreement with our lenders does not prohibit investment, Byju's said on Wednesday.
The Ed-tech company claimed the investments made are high-security fixed-income instruments with a 'multi-hundred billion dollar fund'.
After Byju's made a surprise proposal to repay USD 1.2 billion worth of debt this week, lenders accused the Ed-tech company of hiding USD 533 million in a questionable hedge fund.
Byju’s last year transferred more than half a billion dollars to Camshaft Capital Fund, which was collateral for its USD 1.2 billion loan.
The lenders’ agent, Glas Trust, gained control of the Byju’s unit that issued the debt amount, but by then the cash had vanished, according to Bloomberg. Byju’s defended that it was trying to protect the money from 'predatory lenders'.
According to a lawsuit filed by the lenders in a Miami county court recently, Byju’s has invested in US-based hedge fund Camshaft Capital Fund of William C Morton, which has listed a pancake restaurant in Miami as its principal business address, according to news reports, raising concerns.
Responding to this, a Byju's spokesperson was quoted as saying that they act as a commercially prudent borrower, and like any other large corporate treasury, they made investments in high-security fixed-income instruments.
There is no requirement for Byju’s to maintain cash as collateral, the statement read.
"As a matter of fact, the Delaware court ruling in June this year rejected the lenders’ application for information in relation to the amount in question i.e., part of the funds received by BYJU'S Alpha, the borrowing entity under the Term Loan B," it added.
Byju’s entities are not parties to the proceedings mentioned in the recent media reports, and have not been served with copies of the complaint or motion, the company said.
The startup remained hopeful about settling the dispute.