BYJU’S seeks more time from creditors to renegotiate $1.2B debt: Report

BYJU'S has reportedly sought more time from lenders to recast an agreement governing a $1.2 billion loan that is in breach of covenants.

According to a Bloomberg report, the creditors have until Tuesday to sign a forbearance agreement, which will give BYJU’S time till February 10 to work out wider terms of the loan. 

BYJU'S breached a few terms of the loan, including the September deadline for filing its financials for the year ended March 31, 2022, it added.

The edtech decacorn has offered to raise fresh equity capital and provide creditors with a 'quality of earnings' report and cash verification statements by external auditors, the report said, adding that reworking the agreement would require approval from a simple majority of creditors.

YourStory could not independently verify the report. BYJU’S did not respond to the queries sent by YourStory at the time of publication.

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According to another report by Bloomberg, a group of lenders had asked BYJU'S to repay a part of the $1.2 billion Term B loan that the edtech decacorn raised in November 2021.

Creditors are concerned about the edtech major’s ability to repay, leading to many of them selling the loans. Most of the lenders in the group of creditors bought the debt from primary holders in September when the loan slumped to a record 64.5 cents, the report said, adding that the loan was trading at 81.9 cents on the dollar on Monday.

A small group of creditors are still reportedly holding out on asking the company to use its US unit’s cash reserves of about $815 million to prepay part of the year-old loan. 

The loan is also one of the largest unrated Term loan B offering ever from a new-age company worldwide, according to JPMorgan Chase & Co—one of the deal’s bookrunners. 

BYJU’S losses grew nearly 20X to Rs 4,588 crore in FY21 compared to the previous year, while its total income stood at Rs 2,428 crore. 

Recently, the edtech major laid off 2,500 employees, which makes for about 5% of its workforce, across product, content, media, and technology teams in a cost-cutting initiative as its losses widened.