Byju’s seeks more time from creditors to reschedule $1.2 billion debt: report

Edtech startup Byju’s has asked for more time from creditors to renegotiate a $1.2 billion loan agreement that violates covenants, according to a latest report from news agency Bloomberg.

The creditors have until Tuesday to sign a grace agreement that gives the company until Feb. 10 to negotiate broader terms for the term loan, the people said, asking not to be identified because the information was not made public. is, reported Bloomberg.

A Forbearance Agreement is granted by a lender and is a temporary suspension of loan payments.

The report added that Byju’s is working to appease creditors and investors who are already worried about mounting losses at the once-high-flying startup. The India-based company has offered to raise new equity and provide creditors with a so-called earnings report and cash verification statements from external auditors, the people told Bloomberg.

Some creditors are trying to pay back the loan faster using cash reserves of about $850 million from Byju’s U.S. unit after the parent company missed a September deadline to disclose earnings, Bloomberg reported last month.

The loan was quoted Monday at 81.9 cents per dollar, according to data compiled by Bloomberg. Lenders who bought the debt from primary holders in September, when the loan fell to a record 64.5 cents, were trying to take advantage of accelerated repayments, people had previously said.

According to JPMorgan Chase & Co., one of the bookrunners on the deal, the loan, priced at 550 points above Libor in November 2021, is one of the largest unclassified B term loans ever from a new-age company worldwide.

Byju’s is reported to have spent more than $2.5 billion on various acquisitions in 2021, recently raising $250 million from existing investors and using it to settle ongoing dues.

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