BYJU’S considers asset sale to generate $800M; Epic, Great Learning on the table
With an equity raise and asset monetisation, BYJU’S could potentially repay the TLB and still have funds remaining.
Edtech firm is exploring the sale of two of its assets—Epic and Great Learning—to generate at least $800 million. The development comes as the company strategises to repay the debt associated with a $1.2 billion term loan B (TLB) owed to its lenders, according to people familiar with the matter.
The Byju Raveendran-led company expects Epic to potentially yield between $400-550 million, while Great Learning is anticipated to fetch about $350-425 million, one source aware of the matter told YourStory.
In 2021, BYJU'S purchased Epic, a US-based startup specialising in a digital reading platform for children aged 12 and under, for $500 million, and skilling startup Great Learning for $600 million.
The edtech company is also in discussions to secure equity investments from sovereign funds based in the Middle East, the source said.
“The fundraising conversations are very much alive. There’s another discussion scheduled for Wednesday-Thursday in Abu Dhabi. It is hoping to rebuild the confidence of the investors,” the individual noted.
“Between the equity raise and monetisation of assets, BYJU’S could pay the TLB and still be left with some money in hand,” they added.
BYJU’S asset sale development was first reported by The Economic Times.
The edtech company declined to comment on the development.
Earlier today, Bloomberg reported that the company has proposed an accelerated repayment plan to its lenders, offering to fully repay its $1.2 billion TLB within a period of six months.
The source confirmed the development, noting that BYJU’S has submitted an expedited repayment proposal, initially planned for a three to four-year timeline, which has now been accelerated to just six months.
For nearly a year, both parties have been embroiled in a conflict, with multiple rounds of negotiations to amend the TLB agreement. BYJU’S and its lenders were expected to finalise a term loan amendment before August 3, 2023.
Post the pandemic-led edtech boom, BYJU’S continues to face several challenges, including delays in filing financial statements, issues with lenders over a $1.2-billion TLB, and a dispute with US-based investment fund Davidson Kempner regarding its test prep unit Aakash.
The Bengaluru-based company is expected to complete its FY22 audit by the end of September.
“After the announcement of the FY22 financial results, which are expected by the end of this month, the equity raise will have more momentum and confidence,” the source said.
Over the past few weeks, the edtech firm has witnessed a series of high-level departures, while its test prep subsidiary, Aakash Educational Services, has established an executive council tasked with identifying and appointing new CEO and CFO.
Edited by Suman Singh