The clause hasn’t been accepted by the edtech company, and lenders also want updates on the company’s cash status every two weeks. Byju’s has $650 million in foreign accounts and roughly Rs 1,500 crore in liquid assets in India.
According to persons with direct knowledge of the situation, the lenders of EdTech firm BYJU’s are requesting up to $200 million (about Rs 1,600 crore) in prepayment combined with a higher rate of interest in order to restructure its $1.2 billion (Rs 9,600 crore) term loan B (TLB). This information was provided to ET by people with direct knowledge of the situation.
Although the company, which has its headquarters in Bengaluru, has offered to increase the interest rate by around 200 basis points (bps), it has not yet agreed to the prepayment provision proposed by the lenders, which include several US-based hedge funds, according to the newspaper.
100 tenths of a percentage point are called basis points.
”Byju Raveendran, the founder of the company, reportedly offered to raise the loan interest rate by 200–300 basis points (bps), according to an ET story from March 20.”It appears that the renegotiation was brought on by the delay in publishing the company’s audited financials. Byju’s did not disclose its 2020–21 earnings until 18 months later, in 2017. For the year that ended in March 2022, the company has not yet released its financial information.
As some lenders are reluctant to cooperate, the prepayment is starting to become a sticking point in the negotiations. According to one of the people featured in the paper, it is likely that the lenders would eventually agree to cut the amount of payments.
Debt Refinancing
According to a different source cited in the ET report, BYJU may restructure some of its TLB debt using the proceeds from its new investment round. The quantity might possibly be lower, the individual added.
“A $200 million prepayment was mentioned, but it might end up being less. The company is prioritizing its funding arrangement to refinance part of its debt, according to a source close to Byju, who spoke on the record under the condition of anonymity. However, discussions remain ongoing.
It said that the lenders also requested biweekly updates from the company on its cash flow.
The article further stated that BYJU currently has $650 million in its offshore accounts and that it has roughly Rs 1,500 crore (almost $183 million) stashed in liquid assets in India.
Additionally, Byju’s, the most valued edtech firm in the world, has received $700 million at a flat valuation of $22 billion through two different equity and convertible note offerings.
