Indian edtech titan Byju’s has made a surprise repayment proposal to lenders, in which the firm has offered to pay back its entire $1.2 billion term loan in less than six months, according to people familiar with the situation.
The company is offering to repay $300 million of the distressed debt within three months if the amendment proposal is accepted and the remaining amount in the subsequent three months, said the people, who asked not to be identified because the discussions are private. Byju’s is in talks with private equity funds and strategic investors to sell some of its overseas units to fund the repayment, they said.
Byju’s and its lenders have been mired in a conflict for almost a year, during which rounds of negotiations to revamp its loan agreement have failed. The company decided to miss an interest payment on its term loan, one of the largest by a startup globally, exacerbating a dispute that underpins its mounting distress.
A successful sale of units, including US-based kids’ digital reading platform Epic! Creations Inc., and Great Learning Education Pte., will leave the firm’s eponymous founder, Byju Raveendran, with enough cash to expand the business after paying off all its debt, the people said.
The Bangalore-based company acquired Epic for about $500 million and Great Learning, a professional training and higher education platform, for about $600 million in 2021 in cash-and-stock deals. Byju’s is seeking to raise more than a billion dollars from the divestments, the people said.
The company has sought a swift resolution and execution of an amendment, they said. It’s unclear whether the parties will reach an agreement, a critical step in a broader campaign to turn around the startup once deemed India’s most valuable at $22 billion.
A lenders’ representative declined to comment regarding the repayment proposal from the company. A spokesperson for Byju’s didn’t immediately respond to a request for comment.
The firm, whose parent company is formally known as Think & Learn Pvt, raised the five-year loan in 2021 to bolster its growth outside India. The loan is being quoted at 49.8 cents on the dollar, Bloomberg-compiled data show. A level below 70 is generally considered distressed.
Byju’s is also working on finalising the audited accounts for the financial year ending March 2022 by September 30 and for the subsequent year by December. It will seek to raise fresh equity to boost its business after filing the results, they said.
