After the firm failed to make an interest payment on the debt, the holders of Byju’s $1.2 billion term loan together with their counsel are assessing their options, which include attempting to negotiate with the company for an amendment, initiating litigation, or seeking to seize assets. According to persons with knowledge of the case, the company missed an interest payment.
During a discussion that took place late on Wednesday night, the group discussed potential courses of action, according to the persons, who requested not to be identified because the topic is confidential. According to a story from Bloomberg from earlier, the business had already reached out to a large number of lenders and set a call for the following Monday to discuss a loan revision proposal.
Outside of typical business hours in the United States, the company as well as the advisers for the lenders, Houlihan Lokey Inc. and Kirkland & Ellis, did not immediately reply to calls for comment.
After the pandemic-era online teaching boom ended, Byju’s tried to renegotiate its debt with creditors.
As a result of the company’s violation of the terms of the debt arrangement, the education technology company and its lenders are engaged in a heated dispute on the term loan. It made the decision to forego making an interest payment on the loan on Monday, and it also initiated legal action in the state of New York, claiming that a group of investors fabricated a fictitious financial problem in order to extort money from the company.
According to the persons who were interviewed, advisors made the request to the lender group this week to request an extension of a collaboration agreement that is slated to expire the next month for an extra six months. A contract of this kind obligates the various lenders to work together during the negotiating process.
Byju’s has been seeking to reach an agreement with its creditors in order to restructure the debt after the rise in online tutoring during the pandemic subsided, which put a strain on the company’s finances. However, the discussions were unsuccessful because the creditors requested a more rapid payback.
According to information collated by Bloomberg, the loan to the corporation is currently being priced at somewhere about 64.5 cents.