byjus loan: Byju’s lenders open to negotiations; will act collectively on disputed $1.2 billion loan

As the battle between embattled edtech major Byju’s and lenders for its $1.2 billion term loan B (TLB) intensifies, the creditors are clear they want the company to send a draft loan amendment proposal, even as the scheduled call between both parties on Monday was cancelled, people familiar with the matter told ET.

While the lenders remain open to negotiations, the group has rejected the edtech’s proposal for one-on-one meetings, the people quoted above added.

The lender group signed a cooperation agreement earlier that requires them to act together in negotiations, a source said.

News wire Bloomberg first reported the development on Tuesday night.

It was reported earlier that the lenders and the Indian edtech were expected to meet on Monday this week to discuss a loan amendment proposal. Other options being explored by creditors included litigation or attempting to seize its collateral, as recovery.

Also read | Byju’s and the debt trap haunting Indian tech startups

Last week, Byju’s said the lenders’ demands were “high-handed” while filing its suit in the New York Supreme Court against American investment management firm Redwood and its entities over the TLB.

Also read | Byju’s misses $40 million loan payment, sues term loan lender Redwood

Byju’s missed its quarterly interest payment of about $40 million on the TLB, which was due by June 5, even as it sought to “disqualify” lender Redwood, which has allegedly resorted to “predatory tactics”, and consistently increased its exposure to the loan by acquiring a sizable stake in the TLB with “the intent of making windfall gains”.

Timeline: Byju’s $1.2 billion loan case

In response, a group of lenders, who claim to collectively own more than 85% of a $1.2 billion term loan taken by Byju’s, said the suit filed against their demand for an “accelerated” repayment was “meritless”.

The group, comprising “21 highly respected global institutional investors”, said it has sought to work “constructively with the company over the past nine months to cure its numerous defaults” and will continue to do so in good faith.

Stay on top of technology and startup news that matters. Subscribe to our daily newsletter for the latest and must-read tech news, delivered straight to your inbox.